Limited Liability Company

LLCs were developed to give people the flexibility of partnerships with the liability protection of corporations. Corporations have strict rules regarding annual meetings and minutes, which can be a nuisance to small corporations. LLCs do not have any of the corporate "formalities". Yet they have the same liability protection that corporations do. Because of that, they have become a very popular business entity choice.

Before forming an LLC, check to see if there is a minimum annual tax for LLCs and compare it with any minimum taxes for corporations.

Like corporations, forming an LLC will not protect business owners from actions that they do themselves, from tax debt, or from personally guaranteed debt.

LLCs are popular entities if your business has more than one person doing the work or you want to protect smaller stakeholders from business debt.