Business Structures: Limited Liability Company

The limited liability company is a hybrid of business structures. It is part partnership and part corporation. This structure provides the benefits of partnership income taxation with limited personal liability for the members.

What Is Good about This Business Structure:

• Organized to qualify for taxation as a partnership (2 or more members) and a sole proprietorship (one member).
• No member is liable for the debts and liabilities of another LLC member.
• No limitation on what persons or type of entities may be LLC members.
• Perpetual like a corporation.
• One person may qualify for LLC status.

What Is Bad about this Business Structure:

• Tax and liability benefits vary from state to state.
• May not be used by banking, insurance or nonprofit entities.
• Can elect to be treated as a corporation.

For more information about business structures, bookkeeping methods and taxation, the Oklahoma Tax Commission offers Business Tax Workshops. Make your reservation today!