Benefits of an LLC

1) Limited Liability

The owners, or members, of an LLC have limited liability for all business debts. Each member's personal assets will be protected from lawsuits and judgments against the business, so each owner's liability is limited to the amount each has invested in the company.

2) Pass-Through Taxation

The IRS will automatically treat the LLC as a sole proprietor if there is one member. An LLC with multiple owners will be taxed as a partnership. The owners report their share of the profits and losses of the LLC on their personal tax returns, and no separate tax is assessed on the company itself.

3) Citizenship

You do not have to be a citizen of the United States for an LLC.

4) Management Flexibility

An LLC may have an unlimited number of owners.

5) Flexible Profit & Loss Allocations

Owners of an LLC can agree to allocate the company's profits and losses among themselves however they see fit and not necessarily based on the percentage of the company each owner controls.

6) Simple Recordkeeping

LLCs are not required to hold an annual meeting.

7) Deductible Expenses

Normal business expenses like an owner's salary may be deducted from the profits of an LLC before the LLC's income is allocated to its owners for tax purposes.