Series 66: Limited Liability Companies (LLCs)

Limited Liability Companies (LLCs)

In the last few decades, business owners looking for something offering more protection than a sole proprietorship or general partnership, as well as something less complex than actually starting a corporation, have begun embracing the use of limited liability companies, or LLCs.

As in sole proprietorships and partnerships, the profits or losses of limited liability companies are passed through to its owners, who are referred to as members. Unlike both sole proprietorships and partnerships, business owners can be actively involved in the management of the LLC and avoid exposing themselves and their assets to unlimited liability. In other words, the LLC can act as a shield that protects the assets of the individual members while still allowing them to be fully involved in the business. LLCs are not subject to nearly as strict reporting and meeting requirements as corporations.

Setting up an