Limited Liability Company
A limited liability company (LLC) combines the features of a corporation and a partnership to form an entirely separate business entity. This combination of features allows an LLC to have the protection from personal liability for business debts of a corporation and the pass-through tax structure of a partnership or sole proprietorship.
The owners of an LLC enjoy the benefits of limited liability. Like owners of stock in a corporation, owners of an LLC cannot be held personally liable for business debts and claims against the LLC. Because of this, a properly formed and maintained LLC will prevent creditors from coming after any LLC owner’s personal property or possessions. Only the LLC is liable and the owners only stand to lose what they have invested into the LLC.
For tax purposes, an LLC is a pass-through entity like a partnership or a sole proprietorship. This means that an LLC is not considered a separate entity from its owners. All LLC income passes through the LLC to the owners of the company. These owners then report all profits or losses individually, thus avoiding the double taxation that occurs for within the corporate business form.
Illinois is one of the few states to permit “series” in LLC’s. This allows for different members, liabilities and assets in each series and permits for segregation of liabilities in separate series. This is especially useful for investment real estate and it is useful for managing additional investors in different series.
The LLC form is also very flexible and can allow for many different agreements between the owners and managers of an LLC. If you have any questions about LLCs, please call our office at: (312) 559-8400 or email .
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