BUSINESS ORGANIZATION
A business organization that receives the limited liability of a corporation but is taxed as a proprietorship or partnership is called a Limited Liability Company (LLC).
An LLC is a type of business structure that combines the limited liability protection of a corporation with the tax benefits of a partnership or sole proprietorship. This means that the owners of an LLC, called members, are not personally liable for the company's debts or liabilities, and they are only responsible for the company's obligations up to the amount they have invested in the LLC.
LLCs are also pass-through entities, which means that the income and losses are passed through to the members and reported on their personal income tax returns. This is different from a corporation, which is taxed as a separate legal entity. The LLC members will pay taxes on their share of the LLC's income, regardless of whether the money was actually distributed to them.
LLCs are popular among small business owners because they offer the protection of limited liability and the flexibility of a partnership or sole proprietorship. It also offers the ability for different profit and loss allocations among the members and also can have multiple classes of membership.
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