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 ?
Total cash distribution to Class B investors throughout the fund terms, including the purchase price for the Class B membership interests acquired by each fund in the just concluded transactions, was USD6,149,855 for Fund II and USD12,407,365 for Fund III.
According to the agreement, the manager had to give his permission for a member to withdraw or transfer his or her membership interest.
The securities laws contain many other provisions which, if membership interests are construed as securities, could arguably apply to risk retention groups.
Targa will pay initial cash consideration of USD 565m for the membership interests.
The company's subsidiary, MidCentral Energy Partners (MCLP), sold all the outstanding membership interests in EFS and all of the outstanding RPS to Erick's Holdings.
16 May 2014 -- Virginia US-based bank holding company Middleburg Financial Corp (NASDAQ: MBRG) said that its Middleburg Bank subsidiary has finalised the sale of its membership interests in its majority-owned Southern Trust Mortgage subsidiary.
International Resource News-January 9, 2012--Calumet Lubricants Co LP acquires outstanding membership interests of TruSouth Oil LLC(C)1994-2012 ENPublishing - http://www.
H gifts the remaining 98% of the membership interests he owns to the irrevocable trust.
Here, the distributions were made in exchange for membership interests in the former mutual company; those who received cash had their equity interests extinguished while those who received stock had their equity interests converted from one form to another.
subsidiary has sold its membership interests in Nevada Valley Solar Solutions II LLC to an affiliate of Orix USA, the company said.

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