Limited Liability Companies

A Limited Liability Company, or LLC, is a private limited company. It combines the pass-through taxation of a sole proprietorship, with the limited liability of a corporation. Understanding when to choose an LLC over other types of business entities can be difficult. The team at SAPG Legal can help explain the benefits of and LLC and help you decide whether or not an LLC is right for you.

An LLC is a type of hybrid business entity bringing characteristics of both a corporation and a partnership or sole proprietorship. Primarily only sharing one key aspect with a corporation, its limited liability.

Unlike a corporation, LLCs are treated as a pass-through entity for tax purposes. This means that the income of the entity is treated as the income of the investors or owners. Depending on local tax regulations this structure could help to avoid dividend tax and double taxation. For this reason LLCs as a pass-through entity are considered to be “non-entities” for tax purposes.

LLC’s also have the benefit of being a fluid structure. Owners, or members, can divide the LLC into voting and non-voting ownership, working interest or just equity interest, along with other changes, which are more difficult to implement under a corporation.

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Tax Flexibility

An LLC can elect to be taxed as a sole proprietor, partnership, S corporation, or C corporation offering unparalleled flexibility when tax time comes around. An LLC with multiple members may even specially allocate the members’ share of income, gain, loss, deduction, or credit via the company’s operating agreement.


Depending on the state, owners of an LLC are protected from some or all liability for acts and debts of the LLC. Most states recognize LLCs as a separate entity from their owners. It is possible to shield properties from cross-liability by forming an LLC.


Unlike other business entities, there are no limits on the number of members an LLC may have. Nor is there any citizenship requirement for an LLC. Meaning that you can get your business started while waiting on your immigration proceedings.


LLCs require much less administrative paperwork and record-keeping. Most states only require one person be involved in an LLC.

General Partnership

This is a form of partnership where the rights and responsibilities are divided equally among the partners. Each partner, or “General Partner”, can act on behalf of all the partners, and each partner is responsible for the partnership’s debts and obligations.

Limited Partnership

Another form of a partnership, this is where both “General Partners” and “Limited Partners” exist. This allows each partner to determine or limit their personal liability. Unlike general partners, a limited partner is not responsible for the partnership’s actions, debts and obligations. General partners have the right to manage the business, limited partners do not. Both types of partner can benefit from the partnership’s business.

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