A limited liability company or LLC features some of the attributes of a sole proprietorship, partnership, and corporation in the state in which it is formed.
For example, Wyoming LLC benefits often appeal to business people, as they are flexible, if not lenient.
When you form an LLC, you must consider the type of business, the risk of liability, and your assets. Limited liability allows the owners or members of an LLC to avoid personal responsibility for LLC lawsuits or obligations.
If an LLC files bankruptcy, the members of the business do not have to pay for the company’s debts from their bank accounts. If members are sued, they do not risk the loss of their home to settle the lawsuit.
The IRS considers LLC taxation in the same way as it does taxation for partnerships or sole proprietorships – a pass-through entity. This means that taxes pass through the business to the owner, and he or she is responsible for reporting the profits and losses on his or her tax return.
If you want,