What is a LLC?

A Limited Liability Company (LLC) is a type of business entity established under the laws of the state of California. It is a hybrid of both a corporation and a partnership that combines the advantages of both. An LLC is created by filing Articles of Organization with the Secretary of State, and it is designed to shield the business owners from personal liability for business debts and obligations. In an LLC, each member or owner is only liable for the amount of their investment in the company. This means that if the company has debts, each member is only liable for the amount that they have put into the company. This helps protect the owners from lawsuits and other financial obligations. The LLC is governed by an operating agreement, which sets out the business operations and rules for the management of the business. Each member of the LLC is entitled to their share of the profits and losses, and management decisions are generally made by all the members. Unlike a corporation, an LLC does not pay corporate taxes. Instead, the profits and losses are “passed through” to the individual members, who report the income on their personal tax returns. Overall, an LLC is an attractive and popular business structure in California due to the protection it provides against personal liability and the pass-through taxation that it offers. It is important to consult a qualified corporate attorney to ensure that all filing and legal requirements are properly followed.

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What is a LLC?

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