What are the advantages of a limited liability company (LLC)?
Advantages are liability protection combined with pass-through taxation. In addition, after filing its organizational documents, there are no additional corporate formalities, allowing its members to concentrate on the business and not the legalities of entity “upkeep”. An LLC has an added flexibility in that it can be set up as a “single member LLC” that eliminates the need to prepare and file a separate tax return for the LLC. However, this option should be used carefully and with proper legal counsel, as there is developing case law that would attempt to disregard a single member LLC and treat it simply as a sole proprietorship, potentially wiping out the limited liability protection of the LLC.
