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Video instructions and help with filling out and completing Form 851 disregarded entity
How to form an LLC a limited liability company or an LLC is a relatively new business structure that first appeared in Wyoming in 1977 and is now recognized by every state statute and the IRS an LLC is neither a partnership nor a corporation but a distinct type of business structure that offers an alternative to those two traditional entities by combining the corporate advantages of limited liability with the advantages of passed through taxation usually associated with partnerships limited liability companies are becoming more and more popular and it is easy to see why in addition to combining the best features of partnerships and corporations LLC's avoid the main disadvantages of both of those business structures limited liability companies are much more flexible and require less ongoing paperwork than corporations to maintain them while avoiding the dangers of personal liability that come with the partnership some examples of famous LLC's may surprise you both Amazon and Chrysler are organized as limited liability companies ownership of an LLC owners of an LLC are called members since most states do not restrict ownership members may be individuals corporations and other LLC's domestic or foreign LLC's can generally have an unlimited number of members most states also permit so-called single member LLC's those having only one owner members in an LLC are analogous to partners in a partnership or shareholders in a corporation depending on how the LLC is managed a member will more closely resemble a shareholder if an LLC chooses to be managed by a manager or several managers because then those members who are not managers will not participate in day-to-day management of the company if an LLC does not choose to utilize managers then the members will closely resemble partners because they will have a direct say in the decision-making of the company single versus multiple member LLC an LLC owner buy more than one individual or entity is called a multiple member LLC all states also permit single member LLC's those having only one owner number by default a single member LLC is taxed as a sole proprietorship in other words treated as disregarded entity by the IRS while a multiple member LLC by default is taxed as a partnership advantages of forming LLC LLC is a relatively new type of business structure that combines the best features of the corporation with those of the sole proprietorship or partnership an LLC has many advantages and benefits which cannot be enjoyed together in any other type of business personal liability protection an LLC is an entity separate from its owners being a legally distinct entity the personal assets of each owner such as a home a car or a personal bank account are not reachable by business creditors an LLC members liability is generally limited to the amount of money that person has invested in the LLC thus LLC members are offered the same limited liability protection as the shareholders in a corporation tax advantage LLC's.