What is a limited liability company (LLC)?

A limited liability company (LLC) is a type of business entity created under state law in Washington that offers liability protection for the owners, known as members. An LLC is different from a corporation in that the owners do not have personal liability for debts and obligations of the LLC. Instead, the members of the LLC are only responsible for debts and obligations of the LLC up to the amount of their investments in the company. In other words, the LLC members have limited liability and cannot be held liable for the debts and obligations of the company. That means that if the company goes into debt or has other obligations, the members cannot be held responsible. This is a key difference between LLCs and corporations, where the owners can be held personally liable for the debts and obligations of the corporation. In Washington, LLCs must file articles of organization with the Secretary of State and pay filing fees. LLCs are subject to certain statutory requirements such as record-keeping and annual filings, but generally, there is less paperwork and administrative burden than in corporations. An LLC also has the potential to generate tax savings due to flexible reporting requirements. For asset protection, LLCs are one of the most effective business entities to use in Washington. While an LLC cannot protect the owners from their own wrongful acts, it does provide a layer of protection from creditors who might try to take personal assets to satisfy a LLC debt. It helps keep personal assets separate and protected from legal liabilities associated with the LLC.

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What is a limited liability company (LLC)?

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