Limited Liability Company (LLC)
The limited liability company is a flexible enterprise structure that provides the benefits of both a partnership and corporate entity.


Pertinent data of Limited Liability Company:
Liability: Limited
Nature of Owner's Income: Self-employment income
Federal Tax Forms used: Form 1065, 1120, 1120S or 1040+Schedule C (varies)
Compensation reported: Schedule K-1

Advantages:
Limited liability without having to incorporate
Pass-through income taxation
No double taxation

Disadvantages:
No personal loss deduction for owner or partner
No business continuity
Multiple income tax returns (one for the LLC and one for the partner)

Corporations

Related Articles
  1. Investing

    Understanding Total Liabilities

    Total liabilities are the combined debts an individual or company owes.
  2. Investing

    Reviewing Liabilities On The Balance Sheet

    As an experienced or new analyst, liabilities tell a deep story of how a company finances, plans and accounts for money it will need to pay at a future date.
  3. Taxes

    What is a Tax Liability?

    Tax liability is the amount of money a person or entity owes to the government as the result of a taxable event.
  4. Small Business

    Which Type of Organization Is Best For Your Business?

    Learn the differences between the types of business organizations so you can determine how to best structure your business for tax and liability limitations.
  5. Small Business

    What is Unlimited Liability?

    Unlimited liability means that the owners of a business are liable for the entire amount of debt and obligations of that business.
  6. Personal Finance

    How To Improve Net Worth By Decreasing Liabilities

    Here's an analysis of how to adjust liabilities and assets to improve net worth.
  7. Investing

    Examples Of Asset/Liability Management

    In its simplest form, asset/liability management entails managing assets and cash inflows to satisfy various obligations; however, it's rarely that simple.
  8. Insights

    Limited Liability Partnership (LLP): The Basics

    LLPs are a flexible legal and tax entity that allows partners to benefit from economies of scale by working together while also reducing their liability for the actions of other partners.
  9. Taxes

    How A Schedule K-1 Works

    Schedule K-1 is a U.S. tax document used to report income, losses and dividends.
  10. Trading

    Asset Protection For The Business Owner

    Could incorporating your business help protect it? Find out here.
Frequently Asked Questions
  1. What is 'capital' in relation to the factors of production?

    Find out what economists mean by physical capital, how it contributes to the productivity of labor and why it is a crucial ...
  2. How does industrialization lead to urbanization?

    Discover the connection between industrialization and urbanization and learn how economic growth increases the demand for ...
  3. If a particular good's price elasticity is high, does this mean the supplier should increase the supply, decrease it, or keep it constant?

    Learn the basics of price elasticity of supply and demand and how each influences a company's production of goods and pricing ...
  4. What is the correlation between money supply and GDP?

    Read about the two-way correlation between the total amount of money circulating in the economy and gross domestic product, ...
Trading Center