Limited Liability Company (LLC)
Limited Liability Company (LLC)s are a great type of business structure which offers its owners limited liability while being more flexible in terms of organization & taxation. It’s the perfect hybrid between a corporation & a partnership, taking the best out of both entities.
Limited Liability Company (LLC)s are easy to set up, require minimal paperwork and provide the protection of personal assets from business debts and obligations.
A Scenario : Understanding Limited Liability Company (LLC)
Samantha has always aspired to start her own bakery business. Having a sound knowledge of baking, but lacking expertise in business management & finances, she decided that an LLC would be the best suitable structure for her venture after consulting with experienced friends & mentors in the business arena.
Samantha is in need of help from a lawyer to create the articles of organization as well as submit the right paperwork to formally register her LLC. Additionally, an operating agreement is drawn up by her to outline the ownership and administrative duties of the business.
With the formation of an LLC, Samantha can run the bakery with peace of mind as her personal assets will stay out of harms way. Due to the LLC being a separate legal entity, it provides protection against legal and financial issues.
She enjoys the financial advantage of being in a partnership, as it permits her to retain more of the profits due to tax benefits.
Samantha’s bakery is witnessing great success & expansion due to which she is opting to bring in additional investors & partners. This can be done by taking full advantage of the LLC structure which allows multiple owners without having to undergo any changes in the business formation.
In this scenario, An LLC was the perfect choice for Samantha to start her bakery business, providing her with both protection and flexibility. It allowed the incorporation of partners & investors, while protecting her from personal liability & offering attractive tax advantages.
