6.1.2 Limited Liability Company (“LLC”)

Successful Moo Duk Kwan Studio Ownership

6.1.2 Limited Liability Company (“LLC”)

A limited liability company is a hybrid type of legal structure that provides the limited liability features of a corporation and the tax efficiencies and operational flexibility of a partnership. The owners of an LLC are referred to as “Members.”

Forming an LLC

While each state has slight variations to forming an LLC, they all adhere to some general principles:

Choose a Business Name – When choosing a business name, generally, you must choose the following:

* The LLC name must be different from an existing LLC in your state

* The LLC name must indicate that it's an LLC (such as “LLC” or Limited Company”)

* The LLC name must not include words restricted by your state (such as “bank” and “insurance”)

File the Articles of Organization – The “Articles of Organization” is a simple document that legitimizes your LLC and includes information like your business name, address, and the names of its members. For most states, you file with the Secretary of State.

Advantages Disadvantages

* Limited Liability – Members are protected

from personal liability for business

decisions or actions of the LLC

* Less Recordkeeping

* Sharing of Profits * Limited Life * Self-Employment Taxes