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Why are limited liability companies (LLCs) so popular among small and mid-sized business owners? In a word, liability. Read on to learn more about LLCs, their pros and cons, and the steps to create one, and discover a few big names that either used to be LLCs or use LLCs within their corporate structure.
A limited liability company (LLC) is a business that's created to shield owners from personal liability for any debts or liabilities from the company. It's also an effective means of saving money since it protects owners from the double taxation that often occurs with corporations.
LLCs are especially popular among small and mid-sized businesses since the assets of the owners are protected from legal ramifications such as bankruptcy or lawsuits, unlike sole proprietorships.
Shielding owners from financial liability issues is the No. 1 advantage of an LLC. But limited liability companies offer more advantages over other business structures, including:
Although there are many advantages to forming an LLC, the structure also has a few disadvantages, including:
Limited liability companies are more common than you might think -- and some of them are parts of the world's largest corporations. Indeed, some of the world's largest corporations began life as LLCs, and many have subsidiaries that are limited liability companies, including:
