A limited liability company (LLC) limits personal liability by legally separating the business from its owners. So, if you have business debt or your business partner is accused of negligence, your personal assets such as home and bank account will not be at risk.
An LLC offers numerous advantages such as tax benefits. The income that an LLC generates passes through the entity to the members, managers, and owners.
Types of LLCs
Multi-Member LLCs
Multi-Member LLCs allow multiple individuals or entities to run a business. This structure shares management responsibilities among its members, allowing for a broader pool of financial resources and enhanced asset protection.
Series LLCs
With a Series LLC, a holding company can create as many “children” as it wants. Each child is a series, separate for liability, just as if it were its own LLC.
Professional LLCs (PLLCs)
The main difference between a LLC and a PLLC is that only professionals recognized in a state can form PLLCs. A PLLC is formed by licensed professionals for the purpose of providing professional services. In some states, licensed professionals are required to form PLLCs and they must adhere to regulations regarding professional oversight to protect their client’s interests.
The articles of organization are similar to those for a standard LLC, but extra steps are necessary to file. Owners of an LLC are called members, which may include individuals, corporations, other LLCs, and foreign entities without restriction.
Comparing LLC and PLLC
Standard LLC vs. Series LLC
Both a traditional LLC and a series LLC follow the same formation regulations. The main benefit of a standard LLC over a Series LLC is the ease of formation and management.
Asset Protection in Series LLCs
Asset Protection: Each series or cell in a series LLC is treated as a separate entity for liability and asset protection purposes. This allows different assets and liabilities to be separated among the different series, providing an additional layer of protection.
A Series LLC or SLLC is a special form of a limited liability company allowing you to separate your LLC ownership, assets, and operations into different compartments or series independent from one another. Some refer to a Series LLC as Serial LLC, but it all means the same thing.