Limited liability company

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Limited liability company (LLC)

A company that has characteristics of both a corporation and partnership. Like a corporation, it offers owners limited liability and like a partnership, taxation is at individual owner level rather than at corporate level.

Limited Liability Company

In the United States, a company with limited liability amongst its owners, that is, one in which a partner is not liable for more than his/her/its investment in case of insolvency. In other words, a co-owner of a limited company would lose the value of his/her investment if the company declares bankruptcy, but would not be held liable for other outstanding debts. A limited liability company is one of the most common corporate structures in the United States. It is designated by the letters "LLC" after its name.

A limited liability company is taxed as if it were a partnership, but has the ability to raise capital by acquiring new partners as if it were a corporation. However, because a limited liability company is not publicly-traded, it may have more difficulty raising capital than corporations. A limited liability company is designed to give at least some employees a share in the company's equity, while protecting them from potential losses. See also: Limited company.

Limited liability company.

Organizing a business enterprise as a limited liability company (LLC) under the laws of the state where it operates protects its owners or shareholders from personal responsibility for company debts that exceed the amount those owners or shareholders have invested.

In addition, an LLC's taxable income is divided proportionally among the owners, who pay tax on their share of the income at their individual rates. The LLC itself owes no income tax.

The limited liability protection is similar to what limited partners in a partnership or investors in a traditional, or C, corporation enjoy.

The tax treatment is similar to that of a partnership or S corporation, another form of organization that's available for businesses with fewer than 75 employees. However, only some states allow businesses to use LLC incorporation.

limited liability company

A cross between a corporation and a partnership, the limited liability company must be created by documents filed in the same place as corporations.This type of organization enjoys much of the informality of a partnership, the tax benefits of a partnership with all income taxed at the shareholder level but not at the company level (see double taxation), and the limited liability granted to corporate shareholders, who cannot be held personally liable for a corporate debt or transgressions. Be aware, however, that members of a limited liability company may well be safe from contractual claims against the company, but most claims for negligence or wrongdoing will include some theory of personal liability against the members also.

Example: A claim against a limited liability company may be for its negligence in allowing mud and water to remain on the floor, leading to a customer slipping and falling and sustaining back injuries. The plaintiff in such a case may claim the individual members were also personal- ly liable for their failure to develop policies and procedures to keep the floors clean or because they were also the employees and had personal responsibility to mop the floors.

References in periodicals archive ?
DW Catalyst Fund Limited (the "Company")(a closed-ended investment scheme established as a company with limited liability under the laws of Guernsey with registered number 52520)
was incorporated as a Sino-foreign joint stock company with limited liability in People's Republic of China (PRC) to operate the international airport in Beijing, PRC and certain ancillary commercial businesses.
the Dutch issuer, is an indirect wholly-owned subsidiary of the Company and is incorporated under the laws of the Netherlands as a private company with limited liability.
BH Global Limited (the "Company")(a closed-ended investment scheme established as a company with limited liability under the laws of Guernsey with registered number 48555)
Abu Dhabi Power Bond Limited was incorporated in Jersey, Channel Islands as a company with limited liability for the sole purpose of issuing the Notes.
Abu Dhabi Commercial Bank (ADCB) was formed in 1985 as a public shareholding company with limited liability upon the merger of Emirates Commercial Bank and Federal Commercial Bank with Khaleej Commercial Bank.
Aqua Society is a German company with limited liability that designs and develops technologies for application in the areas of refrigeration, water purification and waste water treatment.