Understand The Advantages And Disadvantages of Limited Liability Companies
Choosing the right legal entity is a critical part of starting a business. Each entity has advantages and disadvantages that must be weighed in light of your goals.
Corporations, for example, provide several advantages: They shield shareholders from corporate liability, offer a centralized governing structure and establish easily transferable ownership interests. Partnerships benefit from more favorable tax treatment, but they don’t have the same liability protection or easily transferrable ownership interests as corporations.
Limited liability companies (LLCs) often offer the best of both worlds. In Texas, Delaware, New York and other states, a properly formed LLC shields individual members from the company’s liabilities while also giving them the benefit of favorable tax treatment. LLCs are now usually the entity of preference because they offer participants the maximum flexibility in organization, governance and tax treatment.
An LLC provides immense flexibility with regard to its governing structure.
LLCs can have a single member or many. Much depends on the terms of the LLC’s operating or company agreement. This foundational document, akin to a corporation’s bylaws, sets out membership rights, distributions, duties and all other aspects of the company’s governance.
Lay The Foundation For Success
At the law firm of Stephen Kaplan, P.C., we provide experienced legal guidance on all aspects of LLCs, from filing the certificate of formation to drafting operating agreements to navigating dissolution and everything in between. Our goal is to help their businesses succeed.
Clients come to us from diverse industries and backgrounds. Drawing on nearly 40 years of experience in the business law realm, our attorney understands not only the law, but also business and economic realities. We offer the advantage of efficient, cost-effective services.