by Leigh Goessl

Created on: November 16, 2009

Traditionally in the U.S. there have been three primary business structures, sole proprietorships, partnerships and corporations. Today there is another option to select as a structure when establishing a company.

In recent years the Limited Liability Company (LLC) has become a pretty popular option and there are many reasons why the limited liability company is a popular business structure.

There are many motivations for people choose to select the LLC as the foundation for their company. The best and primary reason people select the LLC is due to its unique structure.

Its attractiveness is rooted in the fact this kind of business structure can be likened to a hybrid structure. This means the business owners can enjoy the benefits of both partnerships and corporation, but are not confined to the structures of those two business foundations. Enjoying these dual benefits means business owners can derive the best characteristics of partnerships and corporations and avoid some of the drawbacks.

Another primary reason people tend to choose the LLC is because of the beneficial tax advantages that accompany this business structure, but this isn't the only reason.

LLC's possess a higher degree of elasticity because they are not confined to the same stipulations that corporation structure requires. Limited liability companies do not have to have formal meetings, record minutes or have bylaws drawn up like corporations are obliged to do. Instead they can operate under a more simplified agreement and are not duty-bound to the formalized corporation style charters.

Setting up an LLC business is relatively straightforward, although not exactly simple either. Although instead of a official charter, the LLC can enjoy the less formal operating agreement, which contains many of the characteristics of the types of details the partnership agreement contains.

As another plus, the personal liability aspects of partnerships are avoided. or instance if a lawsuit occurs or a debt is incurred by the business, the owners of the LLC are protected from seizure of their personal assets. In addition their assets are protected from being included in any calculations that are done to repay debt or other financial obligations.

The limited liability company was developed as a way to eliminate the deficiencies of partnerships and corporations and use the advantages of each structure. That being the case, since the structure contains the appealing attributes of partnerships and corporations, many people are inclined to establish their company as an LLC.

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