Limited Liability Companies
Limited liability companies, also known as LLCs, are the newest form of business entity and have enjoyed immense popularity since they hit the scene. They combine the pass-through taxation of a sole proprietorship or partnership (taxes on business income are paid on each owner's individiual income tax returns) with the protection against personal liability that corporations offer. It's often a very attractive alternative for business owners looking for liability protection and wanting to avoid the extra red tape and hassle of forming and operating a corporation.
An LLC, like a corporation, is a statutory creature, created and regulated by state law. It's fairly easy to form and operate an LLC although you will have to file LLC articles with the state and pay a filing fee. LLCs are a particularly good choice for single-owner or small businesses operated by a close-knit group of people who want to be able to run their business as they see fit without a lot of governance formalities.
Find out more about forming and running an LLC in this section.