What is an LLC?
“LLC” is an acronym for limited liability company. An LLC is a type of passthrough entity, meaning the owners individual pay tax and not the business itself. An LLC is a business structure allowed by state statute in which owners (referred to as members) of the entity are not personally liable for the company’s debts or liabilities.
Ownership of an LLC has very few restrictions and can be owned by individuals, corporations, other LLCs and foreign entities. Banks and insurance companies cannot be structured at LLCs.
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What is a passthrough entity?
Passthrough entities, which are also known as flow through entities, are entities that file informational tax returns but will not be taxed at the entity level. This means that instead of the business (or entity) paying tax at the business level, the income will flow through to the taxpayer’s individual tax return and will be […]