5 Interesting Facts About Limited Liability Corporations

 Setting up a business requires you to plan the details of its structure as well. One of the more popularly established structures is of Limited Liability Corporations (LLC). These are compared to corporations many times, but they hold vast differences as well.

Do you think that you know everything there is about LLC companies? Think again. Here are five interesting facts about LLCs that you probably didn’t know about before. 

 

LLCs Protect Owners from Personal Liability

It’s common knowledge that LLC companies protect their owners from personal liability. However, did you know that it works in the same way that it works for corporations? That’s right.

LLCs and corporations work similarly when it comes to keeping the liability of the business limited. The members of the LLC don’t need to worry about having any personal liability for the business.

There’s No Limit on the Number of Members LLCs can Have

There’s another fascinating fact about LLCs: they don’t limit the number of members they can have. So, based on the size of the LLC, you can have as many members as needed. The members are the ones making all the decisions and running the company.

The roles of an LLC’s members are all described under the operating agreement. This helps distinguish between the ownership interests, responsibilities, and functionality.

An LLC Borrows Money in its Name

An LLC company is a separate entity. So, it doesn’t require the use of a person’s name to carry out transactions. Any bank transactions you see will have the company’s name rather than a person’s.

The separate identity also further helps in keeping the liability of the company away from the members.

An LLC is Treated as a Partnership for Federal Income Tax

One unique aspect of an LLC is that it’s treated as a partnership when accounting for the federal income tax. This means that the members are taxed directly on their incomes, based on the profits earned by the company.

The entire tax treatment allows the company to be free from double taxation, which is prevalent for corporations.

Any Special Action Requires Permission from the IRS

Any special actions needed to be carried out by the members of the LLC require the submission of a special form. This form is sent to the IRS that includes showing the appropriate profits and losses.

You can now establish your very own LLC company with the help of professional LLC company registration services. Corporations4Less provides you with hassle-free incorporation services, credit repairs, and more. The company provides its services across the United States, including Florida, Texas, and California. Reach out today for more details.