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What are the three main advantages of the LLC?

Limited Personal Liability. Less Paperwork. Tax Advantages of an LLC. Ownership Flexibility. Management Flexibility. Flexible Profit Distributions.

Is an LLC a good idea?

An LLCs simple and adaptable business structure is perfect for many small businesses. While both corporations and LLCs offer their owners limited personal liability, owners of an LLC can also take advantage of LLC tax benefits, management flexibility and minimal recordkeeping and reporting requirements.

What does it mean if you are a limited company?

Key Takeaways. A limited company (LC) is a general term for a type of business organization wherein owners assets and income are separate and distinct from the companys assets and income; known as limited liability.

What is the meaning of a limited liability company?

A limited liability company (LLC) is a business entity that prevents individuals from being liable for the companys financial losses and debt liabilities. In the event of legal action or business failure, liability is assumed by the company rather than its constituent partners or shareholders.

What is the downside to an LLC?

Profits subject to social security and medicare taxes. In some circumstances, owners of an LLC may end up paying more taxes than owners of a corporation. Salaries and profits of an LLC are subject to self-employment taxes, currently equal to a combined 15.3%.

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