Limited liability company

(redirected from Limited liability corporation)
Also found in: Dictionary, Legal, Acronyms.
Related to Limited liability corporation: Limited liability partnership

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 ?
The final form of entity available to practitioners in South Dakota is the Limited Liability Corporation, commonly known as the LLC.
Determine a structure for your restaurant (sole proprietorship, corporation, limited liability corporation, etc.) and select a name.
ParaTec Elastomers, a limited liability corporation that is part of Mexican conglomerate DESC, announced the opening of its new headquarters in the Crossroads West complex in Middlebury, CT.
MWV has formed a limited liability corporation that will combine the business assets of its Corrosion Technology Group with those of Bioclimatic, Inc., Delran, New Jersey, USA.
He said: 'We continue to believe that Argenbright, a stand-alone limited liability corporation, should have no liability arising out of the terrorist incidents of last September.'
But a director of business development at OsterDowJones said that that limited liability corporation's ownership is two-thirds Oster (principally in charge of the technology side) and one-third Dow Jones (responsible for content).
Changing the legal entity of the health club or the law firm to an S corporation, limited liability corporation or partnership would also not change the outcome, unless Temp.
Through LIPA's limited liability corporation, Emerald Health Alliance, LIPA handles Oregon Health Plan claims and those of a few selected plans.
New default rules also apply to classification of foreign eligible entities under a pair of default rules focused on member liability, as follows: Characteristics Under Organizing Statute Default Classification All members have limited liability Corporation Some members have unlimited liability Partnership
The Access Alliance - which began as a joint venture and is now in the process of becoming a limited liability corporation - consists of approximately 30 nursing homes owned by Health Dimensions and 50 nursing homes owned by the Evangelical Lutheran Good Samaritan Society in Minnesota.
The goal of this alternative is not to completely convert the corporation to a limited liability company but to transfer a part of the business to a limited liability corporation format (the part of the limited liability company owned by the corporation's shareholders), without incurring any tax on the transfer.
Jacobs of Allegiant Physician Services refers to the arrangement as a joint venture between the three entities, which are creating a "limited liability corporation." He says the profit under this arrangement is passed back to the owners without being taxed.

Full browser ?