Business Ownership

• An LLC company is created under the provisions of state law. The shareholders are considered partners in the newly created venture. This form of business ownership may be attractive to owners of a family business or who want to leave their interest in the company to their heirs, since the interest in the company can be transferred as a gift to the recipient.
  
  

Tax Advantages

• When it comes to filing federal income tax returns, the LLC can be considered either a corporation or a partnership. If the company is being taxed as a partnership, each one of the partners pays his or her share of the company. Choosing this strategy means that the revenues are not taxed for the corporation and again as they enter the partners' hands.
  
  

Personal Liability Protection

• Becoming a member of an LLC means you are not personally liable for debts or liabilities of the company. The exception to this rule is that the partners are responsible for paying taxes. A member of an LLC can be held personally liable for his or her own actions. Omissions made by a member is another situation where a partner may be personally liable for damages.
  
  Managers with an LLC are treated in a different manner. They can only be held personally responsible for damages if there is evidence that they acted in a reckless manner or intended to hurt the company.
  
  

Farm Businesses

• A farm is a good example of a business that gets handed down from generation to generation. Forming an LLC for the farm venture can make good sense when the time comes to give control of the enterprise to the next generation. An agreement can be prepared to meet the individual needs of the members. It can be relatively informal, as in a partnership, or the farm can be operated as a corporation, with its higher level of formal documentation.
  
  

Get Expert Advice

• Before making a decision about whether to form an LLC partnership or corporation, seek out expert advice from a licensed attorney and an accountant.