What is a limited liability company (LLC)?

A limited liability company (LLC) is a type of business entity recognized in California that offers its owners personal liability protection and tax advantages. An LLC is an alternative to a traditional corporation and allows business owners to limit their personal liability for the debts and obligations of their business. An LLC is formed when the owners file Articles of Organization with the California Secretary of State. LLCs can have one or more owners, called “members.” LLCs offer their members protection from personal liability for business debts and actions, meaning that members are not personally responsible for any debts or obligations related to the LLC. In addition, LLCs in California enjoy tax advantages. Unlike traditional corporations, LLCs are not taxed at both the state and federal level. Instead, LLCs are “pass through” entities, meaning that taxes for the LLC are passed through to the individual members, who then pay taxes on their income. By offering its members both personal liability protection and tax advantages, LLCs are a popular business structure in California. This type of business is especially beneficial to small business owners who are looking to limit their personal liability while still enjoying the advantages that come with running their own business.

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What is a limited liability company (LLC)?

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