Similar to a limited partnership, an LLC provides owners with limited liability while providing some of the income advantages of a partnership. Essentially, the advantages of partnerships and corporations are combined in an LLC, mitigating some of the disadvantages of each.

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Advantages of an LLC:

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• Limits liability to the company owners for debts or losses

• The profits of the LLC are shared by the owners without double-taxation

 

Disadvantages:

 

• Ownership is limited by certain state laws

• Agreements must be comprehensive and complex

• Beginning an LLC has high costs due to legal and filing fees