89. LLC Full-Form | What is Limited Liability Company (LLC)

LLC Full-Form | What is Limited Liability Company (LLC)

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LLC

The abbreviation or full form of LLC is Limited Liability Company

Additional information about LLC full form, abbreviation & meaning

LLC Full-Form | What is Limited Liability Company (LLC)

Limited Liability Company (LLC) is the United States specific form of a private limited company. LLC is a legal form of a company that provides limited liability to its owners in many jurisdictions. LLC can be better described as a hybrid business entity having the characteristics of a corporation as well as a partnership or sole proprietorship. The main advantage of an LLC is that it is more flexible when compared to a corporation and it is generally suitable for companies with single ownership.

Advantages –

  • An LLC can elect to be taxed as a sole proprietor, partnership, S corporation or C corporation providing for a great deal of flexibility.
  • Less administrative work when compared to a corporation.
  • Profits are taxed personally at member-level and not at the LLC level using default tax classification.
  • LLC’s in few states can be set up with only one person involved.
  • In the case of real estate companies, each separate property can be owned by its own, individual LLC, thereby protecting not only the owners but also their other properties from cross-liability.

Disadvantages –

  • It may become difficult to raise financial capital.
  • Many jurisdictions impose a franchise tax on LLCs which is the fee an LLC pays to the state for the enjoying the benefits of limited liability.
  • The management structure of an LLC may not be properly organized.

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