Limited Liability Company, commonly known as an LLC, may pass losses or gains, deductions, or credits to all LLC members in the same way as a partnership.

Having an LLC will help you avoid double taxation – a potential issue that may arise with other corporations. Individual members can benefit through the reduced taxable income if a corporation is operating on a loss.

Regardless of a one-of-a-kind tax treatment, LLCs have all the corporate features like a limited liability. If you aren’t sure about what corporation you should buy, an LLC is the one to choose. That’s because you can easily convert an LLC into a C-Corp but can’t do the opposite as easily.

Characteristics of an LLC:

• There aren’t any shareholders. Instead, there are members.
• Members don’t necessarily have to be US citizens.
• The managing member will run the company.
• If there needs to be a special action, all members should consent to it.
• If there needs to be a special action, the LLC should file an IRS form and show losses and profits.