Business Peek

A. If you wanted to start a business, where would you begin? What would you produce? What type of enterprise would you own? These are common questions young entrepreneurs ask themselves when branching out into the corporate world of goods and services. One business entity type is in the form of an LLC. LLC stands for limited liability company and is a form only found in the U.S. This form of enterprise blends elements of partnership and corporate structures all into one. LLC’s are hybrid business entities that have certain characteristics of corporations, partnerships, and sole proprietors depending on how many owners there are. For example, similar to partnership they share the primary characteristic of pass through income taxation availability, meaning the income of the firm is treated as the income of the owner. Also, a primary characteristic LLC’s share with corporations is limited liability; this is where the owner’s liability is limited to a fixed sum. This sum is the amount invested into the company by the owner; if the company is sued, the owner can only lose up to the amount invested. LLC’s are well suited for single owners holding the same principles and still being more flexible than a corporation. It is a perfectly legal form of company that can also be used for non-profit organizations. But, like any type of business entity, they are diplomatic to the laws of the land. Owners still may undergo personal liabilities if a court adheres to it, when some type of fraud or misrepresentation is involved.