Limited Liability Company (LLC)

The LLC is newer than the General Corporation to US businesses. It doesn’t have to be smaller than a General Corporation, but the LLC is flexible and well suited to a smaller operation and carries other advantages as well. Some of those advantages consist of tax breaks (if the proper paperwork is filed at formation), as well as a reduced burden to keep records and reduced tax liability for the company as well as its investors.

The LLC has a Manager to run the daily operations much as an Officer in a General Corporation. Other persons in the LLC are considered Members. But no further structure is required; the Manager can be a Member, but does not have to be.

It is not necessary for an LLC to elect Directors, Officers, or to hold meetings and issue reports at the same level as a General Corporation, which can provide additional speed and flexibility. LLC's enjoy “freedom of contract” which guarantees this flexibility in Delaware. An LLC is also free to hire managers who are not among its own members, and if properly arranged, these managers can enjoy protection from taxes (which is important in cases where, for example, the manager is not a US resident). In some cases, no one in the LLC is a resident in Delaware except the registered agent of the LLC.

Key Points of Limited Liability Company: