Limited Liability Companies, also known as ("LLCs"), are popular expanding corporate organizations. This entity type appeals to small business owners, as it provides greater flexibility than other corporate structures.
"What is an LLC…" and "What's its most common use?"
The LLCs are a legal entity in the United States used to own, operate and protect a business. They offer the same legal and financial protections as corporations. However, they are easier to manage since they can be controlled by their members (owners), a manager, or a nominee provided by your agent. They don't have to adhere to traditional titles such as CEO or Vice President. However, the roles, policies and procedures are outlined in an operating agreement that can be customized to meet specific business purposes.
Benefits:
Personal liability protection: The LLCs legally exist to separate the entity from its owners. Hence, owners cannot typically be held personally responsible for business debts and liabilities. If the company goes bankrupt or is sued, its owner's personal assets cannot be pursued.
Inexpensive and relatively easy to form: Unlike a corporation, an LLC is affordable depending on the state, and the Registry shall issue the Certificate of Formation between four (4) to six (6) business days.
Flexible Taxation: One of the most significant advantages of forming an LLC as a non-US resident or citizen is that an LLC is a "pass-through entity", which means that taxes can be passed through to the owners, who are taxed on profits at their tax level, this avoids double taxation. Your company is not obligated to US tax as long as your LLC is owned entirely by non-US tax residents (natural or legal persons) and has no US presence.
There are also certain disadvantages to consider before forming an LLC; since companies are regulated by the laws of the state in which they are incorporated, different states may have various regulations governing such companies. Therefore, if you decide to do business in several states, it may be a bit complex to understand and comply with the different requirements of the various states.
LLCs are an excellent choice for privately owned businesses that require legal protection from creditors, protection of personal assets and tax flexibility. If you would like more information about these entities, please do not hesitate to contact us for advice on the type of corporation that best suits your needs.
As an authorized Registered Agent in a plurality of jurisdictions, it would be a pleasure for us to assist you should you require additional information on this type of entity.
Contact us today at contact@viss.com.hk. We look forward to hearing from you.
Comments