Limited Liability Corporations (LLC) are allowed in all states. Owners of LLCs are known as members. The popularity of LLCs has grown over the years because the liability for debt and legal action that can be taken against members is limited.
- In most cases, membership in an LLC is not restricted and can include individuals, companies or a combination of both. A single individual is also usually allowed to form an LLC.
- Some states restrict the type of company that can be an LLC. In many cases insurance companies and banks are not allowed to be LLCs.
- Many aspects regarding control of LLC funds have default regulations set by the state. Many of these default regulations can be overridden by making it clear what powers each member has in the operating agreement.
- Ownership of an LLC is usually determined by how much each member has contributed. However, the LLC can decide internally how much each member owns.
- Profits and shares in the corporation are determined by the amount each member has contributed, unless overridden by the operating agreement. Profits and shares can vary widely, as some members will make larger contributions than others.
- Because the IRS and federal government do not recognize LLCs, another classification must be selected for tax filings. LLCs can be classified as sole proprietorships, corporations or partnerships for tax purposes.
评论