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A Limited Liability Company (LLC) is a very flexible form of business structure that combines elements of the typical corporation and partnership structures. By forming an LLC, you create a legal entity that provides limited liability to its owners. Often, these are incorrectly called a Limited Liability Corporation instead of Limited Liability Company. It is truly a hybrid business entity that can contain elements and/or characteristics of corporations, partnerships and even sole proprietorships, depending on how many owners are involved in the Limited Liability Company. An LLC, even though it is a business entity, is actually a type of unincorporated business and is not a corporation. The main characteristic that an LLC shares with a corporation is the limited liability protection that they both offer. The main characteristic that an LLC shares with a partnership is the pass-through income taxation that they both offer. It is, however, much more flexible than a corporation and is very well suited to single owner businesses.

You should understand that neither limited liability companies nor corporations always protect owners from liability. The legal system in the United States does allow a court system to pierce the corporate veil of an LLC if some type of fraud or misrepresentation is involved or in a situation where the owner uses the company as an ‘alter ego’.

Flexibility and Default Rules

All LLC legal statutes include a phrase similar to “unless otherwise provided for in the operating agreement” and this allows for the flexibility the members of an LLC have in deciding how their LLC will be governed. Some statutes provide default rules for the governance of an LLC that are in effect unless an operating agreement has been adopted.

Income Taxation

For the purposes of the Internal Revenue Service and Federal income tax purposes, LLCs are treated by default as a pass-through entity. If the limited liability company has only one member or owner, it is automatically considered a “disregarded entity” for tax purposes and the owner is allowed to report the income from the LLC on his or her own personal tax return as a Schedule C. If the LLC has multiple owners, it is treated as a partnership and must file IRS form 1065. Partners will then receive a K-1 for their share of losses or income so they can report it on their tax return.

LLCs also have the option of electing to be taxed as a corporation, simply by filing IRS Form 8832. Then, they will be treated the same way as a regular C Corporation or they can elect to be treated as an S-Corporation. If it is treated as a C-Corporation, the entity’s income is taxed before any dividends or distributions are given to the members and then taxation of the dividends or distributions will be taxed as income for the members. Some analysts have recommended the LLC taxed as an S-Corp as the best possible small business structure, because it combines the flexibility and simplicity of the LLC with the self-employment tax savings of the S-Corp.

Advantages

Here are the attributes of a limited liability company that are most widely viewed as advantages:

•Check the box taxation. LLCs have the option of being taxed as a sole proprietor, partnership, S-Corporation or C-Corporation, which provides a great deal of flexibility.
•Limited Liability. The owners of an LLC, who are known as members, are generally protected from some or all liability related to the acts and debts of the LLC, depending on state laws where the LLC formation took place.
•Administrative paperwork and record keeping is significantly simplified compared to a corporation.
•Pass-through taxation is automatic, unless the LLC elects to be taxed as a C-Corporation.
•Profits are taxed at the member’s personal level, rather than at the LLC level by simply using the default tax classification given by the IRS.
•In most states, LLCs are generally treated as being a totally separate entity from the LLCs owners.
•LLC’s can generally be set up with only one person being involved.
•An LLC can assign its membership interests, and the economic benefits of those interests can then be separated and assigned, which provides the economic benefit of distributing the profit and losses of the company, like in a partnership, without actually transferring the title to the interest.
•Except in cases where the LLC has adopted a corporate taxation structure, the income from the LLC will generally remain in the hands of its members
•By adopting an operating agreement, members can generally establish their own rules for governance and protective provisions for the members.
Disadvantages

Here are the attributes of a limited liability company that are most widely viewed as disadvantages:

•Most states do not have a statutory requirement for an LLC to have an operating agreement, however, if you are a member of a multiple member LLC, you may run into problems if you don’t have an operating agreement, since most states do not dictate the governance and protective provision for the members of an LLC as they would with a regular corporation.
•If a member decides to sell his interest in a limited liability company, and if the ownership of the LLC is vested in multiple members, it is not as straight forward as with a corporation since the LLC cannot issue and sell stock certificates.
•Some investors are more comfortable with investing in corporations, due to the possibility of an eventual IPO. This can make it harder to raise financial capital.
•Franchise taxes are levied on LLCs in many states. This tax is essentially a fee the LLC pays the state for the benefit of providing limited liability. This tax can be based on revenue, profits, the number of owners, the amount of capital employed in the state, or some combination of these.
•LLCs are considered to be taxable entities in the District of Columbia, which eliminates the benefits associated with pass-through taxation.
•In some states, renewal or annual fees may be higher than corporations.
•Creditors have been known to require members of LLCs to personally sign for and guarantee debts of the LLC, which obviously makes to owners personally responsible for the debt.

Variations

•A Series LLC is a special and uncommon type of LLC. It allows a single LLC to segregate its assets into separate series.
•A Professional Limited Liability Company, also known as a PLLC, P.L.L.C., or P.L., is a type of LLC that is specifically organized to perform a professional service. This will usually involve professions where the state requires a license to provide these same services, like a doctor, chiropractor, lawyer, accountant, architect, or engineer. Some states do not allow an LLC to participate in the practice of a licensed professional.

Websites have come a long way since it was sufficient to write volumes about a company, post it online, and consider it a success. In today’s world of web 2.0, it is not only recommended, but essential to incorporate online videos. By doing so, companies can increase interactivity with visitors and create higher engagement for potential customers. Gone are the days of writing paragraph after paragraph of information – it is time to say hello to the days of promoting positive user experiences with the use of videos. Hiring an interactive marketing agency has proven to help companies boost visitor attention. Generally there are three ways to successfully incorporate online video into any website.

Customer Testimonials That ‘Speak’ To Visitors

Imagine the impact of posting a video with a real-life customer telling, in their very own words, why a particular product or service was just exactly what they needed. As the scene fades into a visual of that very product the satisfied customer is speaking about exactly how this product met and exceeded expectations. Now compare this to a quote posted on the side of a website. The difference is immeasurable. By using recorded testimonials, interactive marketing agencies help companies bring great credibility and life to customer experiences, hence increasing website conversion rates.

Time To Let The Product Do The Talking

Interactive marketing agencies have found product demonstrations to be invaluable as video resources. Audiences are no longer satisfied reading bullet points; instead they want to be engaged by the product. Features and benefits come to life in a way no copy can do with an online video representation. Make flat, stagnate pictures three-dimensional with a product showcase that illustrates to customers in real life why a certain product is just what they need.

In addition to features and benefits, an interactive marketing agency can assist in transferring instruction manuals and set up guides to online tutorials. Ensure customer satisfaction post-purchase with online videos that will walk them through each seamless step to enjoying the new product. Eliminate buyer’s remorse with tools that won’t leave them wondering how part ‘A’ fits into part ‘B’ to complete the set up process.

360 Degree Tours That Really Make A Statement

For those ‘products’ that are truly a location, 360 degree tours are an absolute must. Allow customers to tour the property or fall in love with the vacation spot all from the comfort of their own computer. Do all the work for them by providing full color, narrated walking tours and engage customers to a point where they can’t wait to see the real deal for themselves. Filmed tours are more than worth the effort; it is absolutely invaluable to offer customers a full view of the property they are interested in.

Online videos provide the opportunity to truly interact with website visitors and engage them in products, services and locations. Hire a professional interactive marketing agency to turn paragraphs of text into visual masterpieces that will convert prospects into lifelong customers. While a major in film production is not required, tasking an interactive marketing agency to make it perfect will be well worth the investment.

Without question the Limited Liability Company has become the most popular business form for small and growing business in Georgia. Because of its ease of operation, tax benefits, flexibility, and virtually unmatched personal legal liability protection, it has easily surpassed the Corporation as the entity of choice for companies in Georgia and throughout the United States. In 2007, there were 56,323 new Limited Liability Companies formed in Georgia, compared to 26,103 new business corporations.

The LLC laws in Georgia are some of the most precise yet simple laws in the country. For example, in Georgia a single person, someone that operates a one person business, can create a single member LLC to provide a layer of liability protection, and still present a larger, more established appearance to the public. The single member LLC allowed under Georgia law also has the advantage of being able to choose special treatment for federal tax purposes. (If there are no employees, the taxes are no different than that of a sole proprietor.)

If you are not in Georgia, you can still have a Georgia LLC created for your business, you may have to register the LLC in the state in which you actually conduct business, but that is generally not a difficult process. If the only business of the LLC is a holder of investment property, or collection of a debt, state registration is generally not required. If you have a business outside of Georgia but would like a Georgia LLC, a non attorney will generally not be able to help you understand the requirements and restrictions, and are actually not allowed to give you legal advice.