Limited liability companies, or LLCs, are one of the various types of business entities from which you can choose when forming a company. Generally speaking, limited liability companies combine the tax advantages and flexibility of a partnership with the liability protections of a corporation, without subjecting small business owners to the onerous reporting requirements and governance rules associated with corporations. When forming a limited liability company there are many factors to consider and questions to ask. The Silicon Valley business attorneys at Structure Law Group, LLP have the knowledge and experience to advise entrepreneurs to weigh all options and make the best decisions for the limited liability company now and in the future.
Like a corporation, a limited liability company is a separate legal and tax entity, meaning that the LLC is separate from the members who manage and operate the business. And also like a corporation, the LLC, and not the LLC’s owners, will be liable for the LLC’s debts. For example, if one sues the LLC to recover on an outstanding debt, only the LLC’s assets can be reached. In other words, an LLC’s members are not personally liable for the LLC’s debts (just like how a corporation’s shareholders are not personally liable for the corporation’s debts). This is significantly different than a general partnership or sole proprietorship, where the partners or the individual owner, respectively, are personally liable for the debts and obligations of the business.