Limited liability company
Encyclopedia
A limited liability company (LLC) is a flexible form of enterprise that blends elements of partnership and corporate structures. It is a legal form of company
that provides limited liability
to its owners in the vast majority of United States
jurisdictions. LLCs do not need to be organized for profit.
Often incorrectly called a "limited liability corporation" (instead of company), it is a hybrid business entity having certain characteristics of both a corporation
and a partnership
or sole proprietorship
(depending on how many owners there are). An LLC, although a business entity, is a type of unincorporated association
and is not a corporation. The primary characteristic an LLC shares with a corporation is limited liability
, and the primary characteristic it shares with a partnership is the availability of pass-through
income taxation
. It is often more flexible than a corporation, and it is well-suited for companies with a single owner.
It is important to understand that limited liability does not imply that owners are always fully protected from personal liabilities. Courts can and sometimes will pierce the corporate veil
of corporations (or LLCs) when some type of fraud
or misrepresentation is involved. Limited liability company members may, in discreet circumstances, also incur a personal liability in cases where distributions to members render the LLC insolvent.
Similarly, the phrase "unless otherwise provided for in the bylaws" is also found in all corporation law statutes but often refers only to a narrower range of matters.
Form 1065. The members of the LLC would be treated as partners and each would receive a K-1 reporting the share of the LLC's income or loss to be reported on that member's tax return.
As an option, LLCs may also elect to be taxed as a corporation by filing IRS Form 8832. They can be treated as a regular C corporation
(taxation of the entity's income prior to any dividends or distributions to the members and then taxation of the dividends or distributions once received as income by the members), or an LLC can elect to be treated as an S corporation
. Some commentators have recommended an LLC taxed as an S-corporation as the best possible small business structure. It combines the simplicity and flexibility of an LLC with the tax benefits of an S-corporation (self-employment tax savings).
The capital is divided into "quotas" (unlike the "Sociedades Anonimas (S.A.)" which capital is divided in "shares"); members limit their responsibility to the nominal value of the quotas subscribed or later acquired.
The number of members shall not exceed fifty.
The administration and representation of the company corresponds to one or more managers, members of the company or not, designated for a specified or unspecified period of time. Alternates may be selected in case of vacancy.
Profits are not taxed personally at the member level but always at the BVBA level.
). The minimum capital is required by law to be at least DKK 80,000 (approximately US$ 16,000) [Before 1 March 2010 DKK 125,000].
is close to German GmbH.
It was in law since 1925.
See also the full article : Société à responsabilité limitée
(GmbH) because it has aspects of a corporation
; on the other hand it could be considered as a kind of Kommanditgesellschaft
(KG), which is the German equivalent of a limited partnership
. Based on the literal translation of the word "company" an LLC should be considered as a kind of KG without any liable partner. For the purpose of taxation the Bundesfinanzministerium (German Federal Ministry of Finance) gives detailed guidelines of the circumstances under which a LLC is to be considered as a "corporation" or as a "limited partnership"; see: Steuerliche Einordnung der nach dem Recht der Bundesstaaten der USA gegründeten Limited Liability Company.
Hungarian LLCs were previously required to have a 3million HUF (Hungarian Forint) (approx. 16k USD) starting capital. This amount has been recently reduced and currently (in 2009) the minimum starting capital is 500k HUF (approx. 2.7k USD). The time of formation by the new electronic formation option has been reduced from 2 weeks to 2 hours, additional cost of formation is around 100k HUF (approx. 540 USD). Kft.s can be formed by the cooperation of lawyers.
The Hungarian Kft. is the most common form of doing business in Hungary. As being part of the European Union (EU), Hungarian Kft.s can now obtain an EU VAT registration number for doing business across the EU. The Hungarian EU-VAT reg.number starts with "HU". This way the existence of the subject company, VAT issues and the cross-check is available on the common EU website for companies.
LLCs are known as Limited Liability Partnership (LLP). There is no minimum capital.
In India Companies are governed and registered under the Companies Act, 1956. New enactment Limited Liability Partnership Act, 2008 is passed for taking care of smaller firms. Under the CA1956, every state has one office of Registrar of Companies under this act. The group of people as prescribed by the act sign together the document Memorandum & Articles of Association and submit to the registrar along with the fees. The Registrar after checking the documents, registers the Company and allocates the Corporate ID number. Since 2007, the registration is done online and payment of fees is accepted online. Institute of Company Secretaries of India, a statutory body appointed under this act, registers charter member for rendering the services under this act, to the corporate. Then Company can apply for PAN card (registration under Income Tax Act, 1961), bank account, apply for issue of shares (for public Companies), of apply for loan to the banks and FIs.
The Company must include Limited (for public Companies) or Private Limited (for Private Companies). The Companies registered under section 25 of this act are non-profit Companies..
Companies append the corresponding abbreviation to their company names.
(J-LLC), a close variant of the American LLC. Japanese Tax authority does not consider J-LLC (Godo-Kaisha) pass-through entity, but as taxable entity.
the equivalent to an LLC is a Besloten Vennootschap. Its name always starts or ends with the letters BV. Minimum capital of a BV is €18,000, normally deposited in a Dutch bank. BV's are taxed on profits, but not on royalty income, nor on capital. Audits are only required if two out of three conditions exist: 1. revenue greater than €8.8M, 2. assets are greater than €4.4M, 3. more than 50 employees in the Netherlands.
the equivalent to an LLC is a Aksjeselskap
. Its name always starts or ends with the letters AS or ASA. Minimum capital of a AS is 100 000 NOK.
LLCs are known as private companies that end with Pvt. Ltd.. They should have at least Rs.
100,000 as their minimum paid up capital.
The capital for any of the above entities is freely determined by its statutes. There is no minimum requirement except for entities with certain types of activities, mainly in the financial markets, and then irrespective of their type.
The minimum start capital is 5,000 PLN (since 2009; until then, 50,000 PLN).
, except if the company owns buildings, in the same way other major properties have to be sold. Nonetheless, the responsibility of the partners is limited to the capital share they hold, and the minimum capital required by law for a "Lda.. is at least 5 euro.
In Russia and certain other former Soviet countries, an entity with a somewhat similar structure is known as Общество с ограниченной ответственностью (lit., 'Company with Limited Liability'), usually abbreviated OOO, or in some CIS
countries as OсOO.
Although a Russian limited liability company shares the same name with a USA LLC, it is different in many ways. Most importantly, Russian LLC is not tax transparent: the company is taxed at the corporate level, and then, upon distribution of dividends, shareholders pay income tax (personal or corporate).
A limited liability company is the most popular form of legal undertaking in Russia for simple shareholding structures.
, in the same way other major properties have to be sold. Nonetheless, the responsibility of the partners is limited to the capital share they hold, and the minimum capital required by law for a S.L. is at least 3000 euro.
Swiss Limited Liability Company: The terms for this kind of company used in the three official languages of the Swiss Confederation are as follows: In German Gesellschaft mit beschränkter Haftung (abbreviation: GmbH), in French Société à responsabilité limitée (abbreviation: S.à r.l. or SARL) and in Italian Società a Garanzia Limitata (abbreviation: SaGL). A Swiss LLC is similar to a LLC with respect to various matters, including the following: Members may also be natural persons, corporations, partnerships or other LLCs, the liability of a member of a Swiss LLC to pay for the LLC's obligations is limited to its capital contribution, a Swiss LLC may be either member-managed or manager-managed, and, unless otherwise provided for in the operating agreement, the members’ right to control or manage a Swiss LLC is proportionate to their individual membership interest. The membership interests in a Swiss LLC have to be registered and, thus, they may only be issued in the name of a member but not to the bearer.
Swiss Corporation
(in English common law context usually translated as company limited by shares): The terms for this kind of company used in the three official languages of the Swiss Confederation are as follows: In German Aktiengesellschaft (abbreviation: AG), in French Société Anonyme (abbreviation: SA) and in Italian Società Anonima (abbreviation: SA). A Swiss corporation is with respect to various matters different to a LLC (including a Swiss LLC): Most important is that a Swiss corporation may, neither by default nor by exercising any respective option provided by the Swiss law, be member-managed like a LLC, as the respective mandatory provisions of Swiss law provide that the board of directors has certain non-transferable duties. Furthermore, the shares of a Swiss corporation may also be issued to the bearer (bearer shares) and, thus, not only in the name of a holder (registered shares), which, however, applies to the membership interests in a Swiss LLC, which may only be registered.
(LLP), created in 2000, is similar to a US LLC in being tax neutral: member partners are taxed at the partner level, but the LLP itself pays no tax. It is treated as a body corporate for all other purposes including VAT
. Otherwise, all companies, including limited companies
and US LLCs, are treated as bodies corporate subject to United Kingdom corporation tax
if the profits of the entity belong to the entity and not to its members.
statute. The LLC is chiefly inspired by the GmbH
, a type of business organization in Germany
, and by limitadas, a type of business organization available in many Latin America
n countries.
In the United States
, the first limited liability company act appeared in Wyoming
in 1977 as special interest legislation for an oil company. In 1980, the Internal Revenue Service
issued a private letter ruling to an LLC formed under Wyoming LLC Act indicating that the IRS would treat the LLC as a partnership for federal tax purposes. However, later that year, the IRS proposed regulations that would deny partnership classification to any business entity in which no member bore personal responsibility for the entity’s liabilities. In 1982, Florida adopted an LLC act modeled on Wyoming’s LLC Act. Due to uncertainty over the tax treatment of LLCs, no other states introduced LLC legislation until after 1988. In 1988, the IRS issued a revenue ruling stating that it would treat a Wyoming-style LLC as a partnership for tax purposes. By 1996, nearly every state had enacted an LLC statute. The National Conference of Commissioners on Uniform State Laws
adopted the Uniform Limited Liability Company Act
in 1996 and revised it in 2006.
AOL
was setup as a LLC during its ownership by Time Warner
from 2001 to 2008. There is a similar setup for BMW
's American subsidiary, BMW of North America, LLC.
Company
A company is a form of business organization. It is an association or collection of individual real persons and/or other companies, who each provide some form of capital. This group has a common purpose or focus and an aim of gaining profits. This collection, group or association of persons can be...
that provides limited liability
Limited liability
Limited liability is a concept where by a person's financial liability is limited to a fixed sum, most commonly the value of a person's investment in a company or partnership with limited liability. If a company with limited liability is sued, then the plaintiffs are suing the company, not its...
to its owners in the vast majority of United States
United States
The United States of America is a federal constitutional republic comprising fifty states and a federal district...
jurisdictions. LLCs do not need to be organized for profit.
Often incorrectly called a "limited liability corporation" (instead of company), it is a hybrid business entity having certain characteristics of both a corporation
Corporation
A corporation is created under the laws of a state as a separate legal entity that has privileges and liabilities that are distinct from those of its members. There are many different forms of corporations, most of which are used to conduct business. Early corporations were established by charter...
and a partnership
Partnership
A partnership is an arrangement where parties agree to cooperate to advance their mutual interests.Since humans are social beings, partnerships between individuals, businesses, interest-based organizations, schools, governments, and varied combinations thereof, have always been and remain commonplace...
or sole proprietorship
Sole proprietorship
A sole proprietorship, also known as the sole trader or simply a proprietorship, is a type of business entity that is owned and run by one individual and in which there is no legal distinction between the owner and the business. The owner receives all profits and has unlimited responsibility for...
(depending on how many owners there are). An LLC, although a business entity, is a type of unincorporated association
Voluntary association
A voluntary association or union is a group of individuals who enter into an agreement as volunteers to form a body to accomplish a purpose.Strictly speaking, in many jurisdictions no formalities are necessary to start an association...
and is not a corporation. The primary characteristic an LLC shares with a corporation is limited liability
Limited liability
Limited liability is a concept where by a person's financial liability is limited to a fixed sum, most commonly the value of a person's investment in a company or partnership with limited liability. If a company with limited liability is sued, then the plaintiffs are suing the company, not its...
, and the primary characteristic it shares with a partnership is the availability of pass-through
Flow-through entity
A flow-through entity is a legal entity where income "flows through" to investors or owners; that is, the income of the entity is treated as the income of the investors or owners. Flow-through entities are also known as pass-through entities or fiscally-transparent entities...
income taxation
Taxation in the United States
The United States is a federal republic with autonomous state and local governments. Taxes are imposed in the United States at each of these levels. These include taxes on income, property, sales, imports, payroll, estates and gifts, as well as various fees.Taxes are imposed on net income of...
. It is often more flexible than a corporation, and it is well-suited for companies with a single owner.
It is important to understand that limited liability does not imply that owners are always fully protected from personal liabilities. Courts can and sometimes will pierce the corporate veil
Piercing the corporate veil
Piercing the corporate veil or lifting the corporate veil is a legal decision to treat the rights or duties of a corporation as the rights or liabilities of its shareholders or directors. Usually a corporation is treated as a separate legal person, which is solely responsible for the debts it...
of corporations (or LLCs) when some type of fraud
Fraud
In criminal law, a fraud is an intentional deception made for personal gain or to damage another individual; the related adjective is fraudulent. The specific legal definition varies by legal jurisdiction. Fraud is a crime, and also a civil law violation...
or misrepresentation is involved. Limited liability company members may, in discreet circumstances, also incur a personal liability in cases where distributions to members render the LLC insolvent.
Flexibility and default rules
The phrase "unless otherwise provided for in the operating agreement" (or its equivalent) is found throughout all existing LLC statutes and is responsible for the flexibility the members of the LLC have in deciding how their LLC will be governed (provided it does not go outside legal bounds). State statutes typically provide automatic or "default" rules for how an LLC will be governed unless the operating agreement provides otherwise.Similarly, the phrase "unless otherwise provided for in the bylaws" is also found in all corporation law statutes but often refers only to a narrower range of matters.
Income taxation
For U.S. Federal income tax purposes, LLCs are treated by default as a pass-through entity. If there is only one member in the company, the LLC is treated as a "disregarded entity" for tax purposes, and an individual owner would report the LLC's income on his or her individual tax return. For LLCs with multiple members, the LLC is treated as a partnership and must file the IRSInternal Revenue Service
The Internal Revenue Service is the revenue service of the United States federal government. The agency is a bureau of the Department of the Treasury, and is under the immediate direction of the Commissioner of Internal Revenue...
Form 1065. The members of the LLC would be treated as partners and each would receive a K-1 reporting the share of the LLC's income or loss to be reported on that member's tax return.
As an option, LLCs may also elect to be taxed as a corporation by filing IRS Form 8832. They can be treated as a regular C corporation
C corporation
C corporation refers to any corporation that, under United States income tax law, is taxed separately from its owners. It is distinguished from an S corporation, which is not taxed separately. Most major companies are treated as C corporations for U.S. income tax purposes.-C corporation vs...
(taxation of the entity's income prior to any dividends or distributions to the members and then taxation of the dividends or distributions once received as income by the members), or an LLC can elect to be treated as an S corporation
S Corporation
An S corporation, for United States federal income tax purposes, is a corporation that makes a valid election to be taxed under Subchapter S of Chapter 1 of the Internal Revenue Code....
. Some commentators have recommended an LLC taxed as an S-corporation as the best possible small business structure. It combines the simplicity and flexibility of an LLC with the tax benefits of an S-corporation (self-employment tax savings).
Advantages
- Choice of tax regimeEntity classification electionFor United States income tax purposes, a business entity may elect to be treated either as a corporation or as other than a corporation. This entity classification election is made by filing Internal Revenue Service Form . Absent filing the form, a default classification applies. U.S...
. An LLC can elect to be taxed as a sole proprietor, partnershipPartnershipA partnership is an arrangement where parties agree to cooperate to advance their mutual interests.Since humans are social beings, partnerships between individuals, businesses, interest-based organizations, schools, governments, and varied combinations thereof, have always been and remain commonplace...
, S corporationS CorporationAn S corporation, for United States federal income tax purposes, is a corporation that makes a valid election to be taxed under Subchapter S of Chapter 1 of the Internal Revenue Code....
or C corporationC corporationC corporation refers to any corporation that, under United States income tax law, is taxed separately from its owners. It is distinguished from an S corporation, which is not taxed separately. Most major companies are treated as C corporations for U.S. income tax purposes.-C corporation vs...
(as long as they would otherwise qualify for such tax treatment), providing for a great deal of flexibility. - Limited liability, meaning that the owners of the LLC, called "members," are protected from some or all liability for acts and debts of the LLC depending on state shield laws.
- Much less administrative paperwork and record keeping than a corporation.
- Pass-through taxationFlow-through entityA flow-through entity is a legal entity where income "flows through" to investors or owners; that is, the income of the entity is treated as the income of the investors or owners. Flow-through entities are also known as pass-through entities or fiscally-transparent entities...
(i.e., no double taxationDouble taxationDouble taxation is the systematic imposition of two or more taxes on the same income , asset , or financial transaction . It refers to taxation by two or more countries of the same income, asset or transaction, for example income paid by an entity of one country to a resident of a different country...
), unless the LLC elects to be taxed as a C corporation. - Using default tax classification, profitsProfit (accounting)In accounting, profit can be considered to be the difference between the purchase price and the costs of bringing to market whatever it is that is accounted as an enterprise in terms of the component costs of delivered goods and/or services and any operating or other expenses.-Definition:There are...
are taxed personally at the member level, not at the LLC level. - LLCs in most states are treated as entities separate from their members, whereas in other jurisdictions case law has developed deciding LLCs are not considered to have separate legal standing from their members (see recent D.C. decisions).
- LLCs in some states can be set up with just one natural personNatural personVariously, in jurisprudence, a natural person is a human being, as opposed to an artificial, legal or juristic person, i.e., an organization that the law treats for some purposes as if it were a person distinct from its members or owner...
involved. - Less risky to be "stolen" by fire-sale acquisitions (more protection against "hungry" investors).
- For Real Estate companies, each separate property can be owned by its own, individual LLC, thereby shielding not only the owners, but their other properties from cross-liability.
Disadvantages
- Although there is no statutory requirement for an operating agreement in most states, members of a multiple member LLC who operate without one may run into problems. Unlike state laws regarding stock corporations, which are very well developed and provide for a variety of governance and protective provisions for the corporation and its shareholders, most states do not dictate detailed governance and protective provisions for the members of a limited liability company. Thus, in the absence of such statutory provisions, the members of an LLC must establish governance and protective provisions pursuant to an operating agreement or similar governing document.
- It may be more difficult to raise financial capitalFinancial capitalFinancial capital can refer to money used by entrepreneurs and businesses to buy what they need to make their products or provide their services or to that sector of the economy based on its operation, i.e. retail, corporate, investment banking, etc....
for an LLC as investors may be more comfortable investing funds in the better-understood corporate form with a view toward an eventual IPOInitial public offeringAn initial public offering or stock market launch, is the first sale of stock by a private company to the public. It can be used by either small or large companies to raise expansion capital and become publicly traded enterprises...
. One possible solution may be to form a new corporation and merge into it, dissolving the LLC and converting into a corporation. - Many states, including AlabamaAlabamaAlabama is a state located in the southeastern region of the United States. It is bordered by Tennessee to the north, Georgia to the east, Florida and the Gulf of Mexico to the south, and Mississippi to the west. Alabama ranks 30th in total land area and ranks second in the size of its inland...
, CaliforniaCaliforniaCalifornia is a state located on the West Coast of the United States. It is by far the most populous U.S. state, and the third-largest by land area...
, KentuckyKentuckyThe Commonwealth of Kentucky is a state located in the East Central United States of America. As classified by the United States Census Bureau, Kentucky is a Southern state, more specifically in the East South Central region. Kentucky is one of four U.S. states constituted as a commonwealth...
, New YorkNew YorkNew York is a state in the Northeastern region of the United States. It is the nation's third most populous state. New York is bordered by New Jersey and Pennsylvania to the south, and by Connecticut, Massachusetts and Vermont to the east...
, PennsylvaniaPennsylvaniaThe Commonwealth of Pennsylvania is a U.S. state that is located in the Northeastern and Mid-Atlantic regions of the United States. The state borders Delaware and Maryland to the south, West Virginia to the southwest, Ohio to the west, New York and Ontario, Canada, to the north, and New Jersey to...
, TennesseeTennesseeTennessee is a U.S. state located in the Southeastern United States. It has a population of 6,346,105, making it the nation's 17th-largest state by population, and covers , making it the 36th-largest by total land area...
, and TexasTexasTexas is the second largest U.S. state by both area and population, and the largest state by area in the contiguous United States.The name, based on the Caddo word "Tejas" meaning "friends" or "allies", was applied by the Spanish to the Caddo themselves and to the region of their settlement in...
, levy a franchise tax or capital values tax on LLCs. (Beginning in 2007, Texas has replaced its franchise tax with a "margin tax".) In essence, this franchise or business privilege tax is the "fee" the LLC pays the state for the benefit of limited liability. The franchise taxFranchise taxFranchise tax is a tax charged by some US states to corporations with a nexus with those states. The common feature of a state's franchise tax is that it is not based on income...
can be an amount based on revenue, an amount based on profits, or an amount based on the number of owners or the amount of capital employed in the state, or some combination of those factors, or simply a flat fee, as in Delaware. Effective in Texas for 2007 the franchise tax is replaced with the Texas Business Margin Tax. This is paid as: tax payable = revenues minus some expenses with an apportionment factor. In most states, however, the fee is nominal and only a handful charge a tax comparable to the tax imposed on corporations. - The District of Columbia considers LLCs to be taxable entities, thus eliminating the benefit of flow-through taxes by subjecting members to double taxation. Typically, LLCs will choose to be taxed as a partnership to avoid double taxation, which occurs in corporations. This allows companies to distribute their income among members who then report it on their personal tax returns.
- Renewal fees may also be higher. Maryland, for example, charges a stock or nonstock corporation $120 for the initial charter, and $100 for an LLC. The fee for filing the annual report the following year is $300 for stock corporations and LLC, and zero for non-stock corporations. In addition, certain states, such as New York, impose a publication requirement upon formation of the LLC which requires that the members of the LLC publish a notice in newspapers in the geographic region that the LLC will be located that it is being formed. For LLC's located in major metropolitan areas (e.g. New York City), the cost of publication can be significant.
- The management structure of an LLC may be unfamiliar to many. Unlike corporations, they are not required to have a board of directors or officers. (This could also be seen as an advantage to some.)
- Taxing jurisdictions outside the US are likely to treat a US LLC as a corporation, regardless of its treatment for US tax purposes, for example if a US LLC does business outside the US or a resident of a foreign jurisdiction is a member of a US LLC.
- The principals of LLCs use many different titles—e.g., member, manager, managing member, managing director, chief executive officer, president, and partner. As such, it can be difficult to determine who actually has the authority to enter into a contract on the LLC's behalf.
Variations
- A Professional Limited Liability Company (PLLC, P.L.L.C., or P.L.) is a limited liability company organized for the purpose of providing professional services. Usually, professions where the state requires a license to provide services, such as a doctorPhysicianA physician is a health care provider who practices the profession of medicine, which is concerned with promoting, maintaining or restoring human health through the study, diagnosis, and treatment of disease, injury and other physical and mental impairments...
, chiropractorChiropractorA Chiropractor, according to the Association of Chiropractic Colleges , "focuses on the relationship between the body's main structures – the skeleton, the muscles and the nerves – and the patient's health. Chiropractors believe that health can be improved and preserved by making adjustments to...
, lawyerLawyerA lawyer, according to Black's Law Dictionary, is "a person learned in the law; as an attorney, counsel or solicitor; a person who is practicing law." Law is the system of rules of conduct established by the sovereign government of a society to correct wrongs, maintain the stability of political...
, accountantAccountantAn accountant is a practitioner of accountancy or accounting , which is the measurement, disclosure or provision of assurance about financial information that helps managers, investors, tax authorities and others make decisions about allocating resources.The Big Four auditors are the largest...
, architectArchitectAn architect is a person trained in the planning, design and oversight of the construction of buildings. To practice architecture means to offer or render services in connection with the design and construction of a building, or group of buildings and the space within the site surrounding the...
, landscape architectLandscape architectA landscape architect is a person involved in the planning, design and sometimes direction of a landscape, garden, or distinct space. The professional practice is known as landscape architecture....
, or engineerEngineerAn engineer is a professional practitioner of engineering, concerned with applying scientific knowledge, mathematics and ingenuity to develop solutions for technical problems. Engineers design materials, structures, machines and systems while considering the limitations imposed by practicality,...
, require the formation of a PLLC. However, some states, such as California, do not permit LLCs to engage in the practice of a licensed profession. Exact requirements of PLLCs vary from state to state. Typically, a PLLC's members must all be professionals practicing the same profession. In addition, the limitation of personal liability of members does not extend to professional malpractice claims. - A Series LLCSeries LLCA series limited liability company, commonly known as a series LLC, is a special form of a limited liability company that provides liability protection across multiple "series" each of which is theoretically protected from liabilities arising from the other series...
is a special form of a Limited liability company that allows a single LLC to segregate its assets into separate series. For example, a series LLC that purchases separate pieces of real estate may put each in a separate series so if the lender forecloses on one piece of property, the others are not affected.
History by country
Companies with limited liability exist in business law worldwide. However, the limited liability company is a specific legal structure defined by the laws of U.S. states, with quite distinct characteristics. Many other countries have similar structures.Argentina
"Sociedad de Responsabilidad Limitada" (S.R.L.) (Ley de sociedades comerciales 19.550)The capital is divided into "quotas" (unlike the "Sociedades Anonimas (S.A.)" which capital is divided in "shares"); members limit their responsibility to the nominal value of the quotas subscribed or later acquired.
The number of members shall not exceed fifty.
The administration and representation of the company corresponds to one or more managers, members of the company or not, designated for a specified or unspecified period of time. Alternates may be selected in case of vacancy.
Belgium
In Belgium, there are several forms of corporation which provide limited liability. The Besloten Vennootschap met Beperkte Aansprakelijkheid (BVBA) in Dutch, or Société privée à responsabilité limitée (SPRL) in French, is the smallest, with minimum required startup capital of EUR 18,550, and is mostly used by smaller business owners to protect themselves in case of bankruptcy.Profits are not taxed personally at the member level but always at the BVBA level.
Bosnia and Herzegovina
Bosnian and Herzegovinian legislation, similarly to that in Croatia, contemplates LLCs as društvo s ograničenom odgovornošću (d.o.o.). Companies using this structure append the abbreviation d.o.o. to their company name. A shareholder or member in a d.o.o. is only personally liable up to the value of the member's investment in the company.Brazil
The corporate structure in Brazilian law most similar to the United States LLC is the Sociedade Limitada ("Ltda."), under the new Brazilian Civil Code of 2002. The "sociedade limitada" is the new name of the "sociedade por quotas de responsabilidade limitada", and it can be organized as "empresária" or "simples", under this new code, roughly corresponding to the form types of "comercial" [commercial] and "civil" [non commercial] of the Commercial Code.Bulgaria
Bulgarian legislation contemplates LLCs as Дружество с ограничена отговорност (Druzhestvo s ogranichena otgovornost; Partnership with limited liability). Companies working under this structure append the abbreviation ООД (OOD) to their name. In case of an LLC with individual owner it is contemplated as Еднолично дружество с ограничена отговорност (Ednolichno druzhestvo s ogranichena otgovornost; One-man/ Single-member partnership with limited liability) and abbreviated as ЕООД (EOOD).Chile
Chilean legislation contemplates LLCs as Sociedad Comercial de Responsabilidad Limitada (Limited Liability Commercial Association). Companies working under this structure append the abbreviation Ltda. to their name. Therefore, a company which in the United States is called SomeCompany LLC would be called SomeCompany Ltda. in Chile. However, in the case of an LLC with one individual owner, the equivalent in Chile would be an Empresa Individual de Responsabilidad Limitada which uses the EIRL abbreviation.Colombia
Colombian legislation contemplates a very similar structure as mentioned above in the Chilean case. The Ltda. abbreviation is also used in Colombia. However, in the case of an LLC with one individual owner, the equivalent in Colombia would be an Empresa Unipersonal which uses the EU abbreviation.Croatia
Croatian legislation contemplates LLCs as društvo s ograničenom odgovornošću. Companies working under this structure append the abbreviation d.o.o. to their name.Czech Republic
Czech legislation contemplates LLCs as společnost s ručením omezeným (s.r.o. or spol. s r.o.). An s.r.o. is not technically comparable to an LLC because the profits are still subject to double taxation. Czech law does not offer a possibility to start up a limited company without the possibility of avoiding double taxation. The minimum start-up capital for an s.r.o. is CZK 200,000 (approximately USD 11,000).Denmark
The Danish form of the LLC is the anpartsselskab (see ApSApS
ApS is an abbreviation for "", the Danish term for a limited liability company. ApS, when appended to the end of a Danish company name, is similar to Ltd. after the name of a British company. An ApS is required to have capital of at least 80,000 DKK .-References:*...
). The minimum capital is required by law to be at least DKK 80,000 (approximately US$ 16,000) [Before 1 March 2010 DKK 125,000].
Dominican Republic
Dominican Republic legislation contemplates LLCs as Sociedad de Responsabilidad Limitada, also known for their abbreviation "S.R.L.". S.R.L.'s award limited liability to its members up to their contribution in the company (i.e. contribution of capital). This type of company began after the law number 479 of the year 2008.Estonia
In Estonia, a limited liability company is referred to as osaühing (OÜ). The type of entity is also required to be identified in the name.Finland
Although not an exact equivalent, the Finnish version of the LLC is the Oy (osakeyhtiö) or in Swedish Ab (aktiebolag). An Oy is taxed as a corporation. The minimum capital required by law is EUR 2,500.France
S.A.R.L. or Société à Responsabilité Limitéeis close to German GmbH.
It was in law since 1925.
See also the full article : Société à responsabilité limitée
Société à responsabilité limitée
A Société à responsabilité limitée, also known by the acronym SARL , is a private limited liability corporate entity that exists in France, Switzerland, Luxembourg, Macau, Algeria, Morocco, Tunisia, and Lebanon and has commerce as its purpose.A SARL is a company whose liability is limited to the...
Germany
Because of its hybrid characteristics it is very difficult to determine the German equivalent. On one hand it is possible to consider it as a kind of Gesellschaft mit beschränkter HaftungGesellschaft mit beschränkter Haftung
Gesellschaft mit beschränkter Haftung is a type of legal entityvery common in Germany, Austria, Switzerland, and other Central European countries...
(GmbH) because it has aspects of a corporation
Corporation
A corporation is created under the laws of a state as a separate legal entity that has privileges and liabilities that are distinct from those of its members. There are many different forms of corporations, most of which are used to conduct business. Early corporations were established by charter...
; on the other hand it could be considered as a kind of Kommanditgesellschaft
Kommanditgesellschaft
A Kommanditgesellschaft is the German name for a limited partnership business entity and is used in German, Austrian and some other European legal systems....
(KG), which is the German equivalent of a limited partnership
Limited partnership
A limited partnership is a form of partnership similar to a general partnership, except that in addition to one or more general partners , there are one or more limited partners . It is a partnership in which only one partner is required to be a general partner.The GPs are, in all major respects,...
. Based on the literal translation of the word "company" an LLC should be considered as a kind of KG without any liable partner. For the purpose of taxation the Bundesfinanzministerium (German Federal Ministry of Finance) gives detailed guidelines of the circumstances under which a LLC is to be considered as a "corporation" or as a "limited partnership"; see: Steuerliche Einordnung der nach dem Recht der Bundesstaaten der USA gegründeten Limited Liability Company.
Hungary
Hungarian legislation contemplates LLCs as Korlátolt felelősségű társaság. Companies working under this structure append the abbreviation Kft. to their name.Hungarian LLCs were previously required to have a 3million HUF (Hungarian Forint) (approx. 16k USD) starting capital. This amount has been recently reduced and currently (in 2009) the minimum starting capital is 500k HUF (approx. 2.7k USD). The time of formation by the new electronic formation option has been reduced from 2 weeks to 2 hours, additional cost of formation is around 100k HUF (approx. 540 USD). Kft.s can be formed by the cooperation of lawyers.
The Hungarian Kft. is the most common form of doing business in Hungary. As being part of the European Union (EU), Hungarian Kft.s can now obtain an EU VAT registration number for doing business across the EU. The Hungarian EU-VAT reg.number starts with "HU". This way the existence of the subject company, VAT issues and the cross-check is available on the common EU website for companies.
Iceland
According to the Icelandic legislation there are two types of LLC forms, private and public held limited liability forms. Private LLC is abbreviated "Ehf." with the minimum capital of 500.000 Icelandic krónas (kr.). Public LLC is abbreviated "Hf." with minimum capital of 2.000.000 kr.India
In IndiaIndia
India , officially the Republic of India , is a country in South Asia. It is the seventh-largest country by geographical area, the second-most populous country with over 1.2 billion people, and the most populous democracy in the world...
LLCs are known as Limited Liability Partnership (LLP). There is no minimum capital.
In India Companies are governed and registered under the Companies Act, 1956. New enactment Limited Liability Partnership Act, 2008 is passed for taking care of smaller firms. Under the CA1956, every state has one office of Registrar of Companies under this act. The group of people as prescribed by the act sign together the document Memorandum & Articles of Association and submit to the registrar along with the fees. The Registrar after checking the documents, registers the Company and allocates the Corporate ID number. Since 2007, the registration is done online and payment of fees is accepted online. Institute of Company Secretaries of India, a statutory body appointed under this act, registers charter member for rendering the services under this act, to the corporate. Then Company can apply for PAN card (registration under Income Tax Act, 1961), bank account, apply for issue of shares (for public Companies), of apply for loan to the banks and FIs.
The Company must include Limited (for public Companies) or Private Limited (for Private Companies). The Companies registered under section 25 of this act are non-profit Companies..
Italy
The Italian Civil Code, approved in 1942 and as amended by the Government Act 6/2003 and furthers modifications, mainly provides three forms of limited liability company:- Società per azioni (S.p.A.): the minimum required starting capital for an SpA is EUR 120,000. The capital is divided into shares (azioni) that can be transferred by endorsment or bought and sold on stock exchange. Only SpAs can be quoted in stock exchange market, issue corporate bonds and other financial instruments. SpA form and a higher capital are required by law to operate in protected businesses (i.e. banks, leasing companies, etc.)
- Società a responsabilità limitata (Srl). The minimum required starting capital for an Srl is EUR 10,000. Its capital is divided into stakes (quote) whom can be bought or sold just by notarial act. SRLs can issue corporate bonds but are subject to many limitations. Similar to SRL is Società Cooperativa a Responsabilità Limitata whose scope is not making profit but give benefits to stakes' holders.
- Società in accomandita per azioni (Sapa). The minimum required starting capital for a Sapa is EUR 120,000 divided into shares. Sapas have a mixed liability scheme, where standard shareholders have limited liability while managing shareholders have full liability. Except this, SAPAs are exactly like SPAs even if uncommon.
Companies append the corresponding abbreviation to their company names.
Japan
Japan passed legislation in 2006 creating a new type of business organization, godo kaishaGodo kaisha
A gōdō gaisha , abbreviated GK, is a type of business organization in Japan modeled after the American limited liability company...
(J-LLC), a close variant of the American LLC. Japanese Tax authority does not consider J-LLC (Godo-Kaisha) pass-through entity, but as taxable entity.
Latvia
In Latvia, a limited liability company is referred to as Sabiedrība ar Ierobežotu Atbildību. Abbreviation SIA is usually added before the company name. SIAs are recorded in a public register called Register of Enterprises (UR).Lithuania
In Lithuania, a limited liability company is referred to as uždaroji akcinė bendrovė. Abbreviation UAB is usually added before the company name. The minimum required starting capital is currently 10,000 LTL (approximately 3000 EUR). The sum can be immediately invested.Macedonia
Macedonian legislation contemplates LLCs as Drushtvo so Ogranicena Odgovornost. Companies working under this structure append the abbreviation d.o.o. or "д.о.о" to their name.Mexico
Mexican legislation contemplates LLCs as Sociedades de Responsabilidad Limitada, also known for their abbreviation "S. de R.L.". S. de R.L.'s award limited liability to its members up to their contribution in the company (i.e. contribution of capital) and also act as pass-through or flow-through entities whereby profits are "passed-through" to its members, avoiding double taxation. This type of company is widely used by foreign investors in Mexico because of its "pass-through" modality and its "check the box" capability under the IRC (Internal Revenue Code of the U.S.).Moldova
Moldovan legislation contemplates LLCs as Societate cu Răspundere Limitată, abbreviated "S.R.L.", and are regulated member(s)-founder(s), and other non-founder members, minimum one member-founder and maximum total of 50 members, at least one of them must be the founder of the company, but all of the 50 could be also founders.Netherlands
In the NetherlandsNetherlands
The Netherlands is a constituent country of the Kingdom of the Netherlands, located mainly in North-West Europe and with several islands in the Caribbean. Mainland Netherlands borders the North Sea to the north and west, Belgium to the south, and Germany to the east, and shares maritime borders...
the equivalent to an LLC is a Besloten Vennootschap. Its name always starts or ends with the letters BV. Minimum capital of a BV is €18,000, normally deposited in a Dutch bank. BV's are taxed on profits, but not on royalty income, nor on capital. Audits are only required if two out of three conditions exist: 1. revenue greater than €8.8M, 2. assets are greater than €4.4M, 3. more than 50 employees in the Netherlands.
Norway
In NorwayNorway
Norway , officially the Kingdom of Norway, is a Nordic unitary constitutional monarchy whose territory comprises the western portion of the Scandinavian Peninsula, Jan Mayen, and the Arctic archipelago of Svalbard and Bouvet Island. Norway has a total area of and a population of about 4.9 million...
the equivalent to an LLC is a Aksjeselskap
Aksjeselskap
Aksjeselskap is the Norwegian term for a stock-based company. It is usually abbreviated AS or A/S, especially when used in company names. An AS is always a limited company, i.e. the owners cannot be held liable for any debt beyond the stock capital...
. Its name always starts or ends with the letters AS or ASA. Minimum capital of a AS is 100 000 NOK.
Pakistan
In PakistanPakistan
Pakistan , officially the Islamic Republic of Pakistan is a sovereign state in South Asia. It has a coastline along the Arabian Sea and the Gulf of Oman in the south and is bordered by Afghanistan and Iran in the west, India in the east and China in the far northeast. In the north, Tajikistan...
LLCs are known as private companies that end with Pvt. Ltd.. They should have at least Rs.
Pakistani rupee
The rupee is the currency of Pakistan. The issuance of the currency is controlled by the State Bank of Pakistan, the central bank of the country. The most commonly used symbol for the rupee is Rs, used on receipts when purchasing goods and services. In Pakistan, the rupee is referred to as the...
100,000 as their minimum paid up capital.
Peru
There is no direct equivalent of an LLC in Peru, but some similar corporate forms include:- Sociedad anónima cerrada (SAC), a corporation which must have at least two and not more than twenty shareholders ; its shares may not be offered to the public and cannot be traded on the stock exchange.
- Sociedad comercial de responsabilidad limitada (SRL), a commercial partnership divided in equal participations which may not be called "shares". It must have at least two and not more than twenty partners.
- Sociedad civil de responsabilidad limitada (S civil de RL), a professional partnership of at least two and not more than thirty individuals, with co-owner participation in the form of capital, of professional contribution, or of any combination of both.
- Empresa individual de responsabilidad limitada (EIRL), a legal entity with one single owner.
The capital for any of the above entities is freely determined by its statutes. There is no minimum requirement except for entities with certain types of activities, mainly in the financial markets, and then irrespective of their type.
Poland
In Poland, a limited liability company is referred to literally as company with limited liability (Spółka z ograniczoną odpowiedzialnością, abbreviated as Sp. z o.o.).The minimum start capital is 5,000 PLN (since 2009; until then, 50,000 PLN).
Portugal
In Portugal, LLCs are called "Sociedades de Responsabilidade Limitada", that is, Company of limited responsibility, usually abbreviated "Lda.". They are tax subject, and company shares cannot be sold in a public market, since 2006 the transference of them are not required to be done in the presence of a civil law notaryNotary
A notary is a lawyer or person with legal training who is licensed by the state to perform acts in legal affairs, in particular witnessing signatures on documents...
, except if the company owns buildings, in the same way other major properties have to be sold. Nonetheless, the responsibility of the partners is limited to the capital share they hold, and the minimum capital required by law for a "Lda.. is at least 5 euro.
Romania
Romania recognizes the limited liability company since 1990 under the name of "societate cu răspundere limitată" (S.R.L.) in which the owners are personally liable for the company obligations within the limit of their contribution to social capital. The minimum start capital is 200 RON which currently amounts to less than 50 EuroRussia
- "ООО" (with Cyrillic letters) redirects here. For other uses, see OOOOOOOOO may refer to:* OpenOffice.org, an office application suite* Out-of-order execution, a paradigm in microprocessors* Out Of Office, a day off, holidays* Limited liability company OOO may refer to:* OpenOffice.org, an office application suite* Out-of-order execution, a paradigm in microprocessors*...
(Latin letters).
In Russia and certain other former Soviet countries, an entity with a somewhat similar structure is known as Общество с ограниченной ответственностью (lit., 'Company with Limited Liability'), usually abbreviated OOO, or in some CIS
Commonwealth of Independent States
The Commonwealth of Independent States is a regional organization whose participating countries are former Soviet Republics, formed during the breakup of the Soviet Union....
countries as OсOO.
Although a Russian limited liability company shares the same name with a USA LLC, it is different in many ways. Most importantly, Russian LLC is not tax transparent: the company is taxed at the corporate level, and then, upon distribution of dividends, shareholders pay income tax (personal or corporate).
A limited liability company is the most popular form of legal undertaking in Russia for simple shareholding structures.
Serbia
Serbian legislation contemplates LLCs as društvo sa ograničenom odgovornošću. Companies working under this structure append the abbreviation d.o.o. or DOO to their name same as in Croatia. As in the Czech Republic, a d.o.o. is not technically comparable to an LLC because the profits are still subject to double taxation.Slovakia
In Slovakia, the law contemplates spoločnosť s ručením obmedzeným (abbr. spol. s r. o.) or as the rough equivalent of a limited liability company. One to 50 associates can found it through a founding agreement with minimum capital of 5000€, minimum 750€ per person, in money or other property. (§ 105 and following of Act. No 513/1991 Coll. - Commercial Code as amended)Slovenia
Slovenian legislation contemplates LLCs as družba z omejeno odgovornostjo. Companies working under this structure append the abbreviation d.o.o. to their name. The minimum required starting capital for a d.o.o. is 7.500 EUR. Due to high cost and complicated bookkeeping of a real Corporation, this is a more widespread form.Spain
In Spain, LLCs are called "Sociedad de responsabilidad limitada", that is, Company of limited responsibility, usually abbreviated S.L. They are tax subject, and company shares cannot be sold in a public market, the transference of them having to be done compulsorily in the presence of a civil law notaryNotary
A notary is a lawyer or person with legal training who is licensed by the state to perform acts in legal affairs, in particular witnessing signatures on documents...
, in the same way other major properties have to be sold. Nonetheless, the responsibility of the partners is limited to the capital share they hold, and the minimum capital required by law for a S.L. is at least 3000 euro.
Sweden
Sweden has no equivalent of an LLC. The closest is the Swedish AB (aktiebolag), though a Swedish AB is a tax subject and is more similar to a US C Corporation than an LLC. The minimum capital required by law for a minimum at SEK 50,000. for a private AB and SEK 500,000 for a public AB.Switzerland
The Swiss Code of Obligations provides for different kinds of companies with limited liability, the two most commonly used are:Swiss Limited Liability Company: The terms for this kind of company used in the three official languages of the Swiss Confederation are as follows: In German Gesellschaft mit beschränkter Haftung (abbreviation: GmbH), in French Société à responsabilité limitée (abbreviation: S.à r.l. or SARL) and in Italian Società a Garanzia Limitata (abbreviation: SaGL). A Swiss LLC is similar to a LLC with respect to various matters, including the following: Members may also be natural persons, corporations, partnerships or other LLCs, the liability of a member of a Swiss LLC to pay for the LLC's obligations is limited to its capital contribution, a Swiss LLC may be either member-managed or manager-managed, and, unless otherwise provided for in the operating agreement, the members’ right to control or manage a Swiss LLC is proportionate to their individual membership interest. The membership interests in a Swiss LLC have to be registered and, thus, they may only be issued in the name of a member but not to the bearer.
Swiss Corporation
Corporation
A corporation is created under the laws of a state as a separate legal entity that has privileges and liabilities that are distinct from those of its members. There are many different forms of corporations, most of which are used to conduct business. Early corporations were established by charter...
(in English common law context usually translated as company limited by shares): The terms for this kind of company used in the three official languages of the Swiss Confederation are as follows: In German Aktiengesellschaft (abbreviation: AG), in French Société Anonyme (abbreviation: SA) and in Italian Società Anonima (abbreviation: SA). A Swiss corporation is with respect to various matters different to a LLC (including a Swiss LLC): Most important is that a Swiss corporation may, neither by default nor by exercising any respective option provided by the Swiss law, be member-managed like a LLC, as the respective mandatory provisions of Swiss law provide that the board of directors has certain non-transferable duties. Furthermore, the shares of a Swiss corporation may also be issued to the bearer (bearer shares) and, thus, not only in the name of a holder (registered shares), which, however, applies to the membership interests in a Swiss LLC, which may only be registered.
United Kingdom
The new form of limited liability partnershipLimited liability partnership
A limited liability partnership is a partnership in which some or all partners have limited liability. It therefore exhibits elements of partnerships and corporations. In an LLP one partner is not responsible or liable for another partner's misconduct or negligence. This is an important...
(LLP), created in 2000, is similar to a US LLC in being tax neutral: member partners are taxed at the partner level, but the LLP itself pays no tax. It is treated as a body corporate for all other purposes including VAT
Vat
Vat or VAT may refer to:* A type of container such as a barrel, storage tank, or tub, often constructed of welded sheet stainless steel, and used for holding, storing, and processing liquids such as milk, wine, and beer...
. Otherwise, all companies, including limited companies
Limited company
A limited company is a company in which the liability of the members or subscribers of the company is limited to what they have invested or guaranteed to the company. Limited companies may be limited by shares or by guarantee. And the former of these, a limited company limited by shares, may be...
and US LLCs, are treated as bodies corporate subject to United Kingdom corporation tax
United Kingdom corporation tax
Corporation tax is a tax levied in the United Kingdom on the profits made by companies and on the profits of permanent establishments of non-UK resident companies and associations that trade in the EU. Prior to the tax's enactment on 1 April 1965, companies and individuals paid the same income tax,...
if the profits of the entity belong to the entity and not to its members.
Ukraine
This type of entity exists in this country since the 1990s. In Ukrainian it is spelled "Товариство з обмеженою відповідальністю" (abbreviated – TОВ, TзОВ), in transliteration "Tovarystvo z Obmezhenoyu Vidpovidalnistyu," that is, "Company of limited liability."U.A.E.
This type of entity exists in the U.A.E. states as a widely accepted way to do business and is referred as L.L.C..United States
A Limited Liability Company (LLC) is a relatively new business structure authorized by stateU.S. state
A U.S. state is any one of the 50 federated states of the United States of America that share sovereignty with the federal government. Because of this shared sovereignty, an American is a citizen both of the federal entity and of his or her state of domicile. Four states use the official title of...
statute. The LLC is chiefly inspired by the GmbH
Gesellschaft mit beschränkter Haftung
Gesellschaft mit beschränkter Haftung is a type of legal entityvery common in Germany, Austria, Switzerland, and other Central European countries...
, a type of business organization in Germany
Germany
Germany , officially the Federal Republic of Germany , is a federal parliamentary republic in Europe. The country consists of 16 states while the capital and largest city is Berlin. Germany covers an area of 357,021 km2 and has a largely temperate seasonal climate...
, and by limitadas, a type of business organization available in many Latin America
Latin America
Latin America is a region of the Americas where Romance languages – particularly Spanish and Portuguese, and variably French – are primarily spoken. Latin America has an area of approximately 21,069,500 km² , almost 3.9% of the Earth's surface or 14.1% of its land surface area...
n countries.
In the United States
United States
The United States of America is a federal constitutional republic comprising fifty states and a federal district...
, the first limited liability company act appeared in Wyoming
Wyoming
Wyoming is a state in the mountain region of the Western United States. The western two thirds of the state is covered mostly with the mountain ranges and rangelands in the foothills of the Eastern Rocky Mountains, while the eastern third of the state is high elevation prairie known as the High...
in 1977 as special interest legislation for an oil company. In 1980, the Internal Revenue Service
Internal Revenue Service
The Internal Revenue Service is the revenue service of the United States federal government. The agency is a bureau of the Department of the Treasury, and is under the immediate direction of the Commissioner of Internal Revenue...
issued a private letter ruling to an LLC formed under Wyoming LLC Act indicating that the IRS would treat the LLC as a partnership for federal tax purposes. However, later that year, the IRS proposed regulations that would deny partnership classification to any business entity in which no member bore personal responsibility for the entity’s liabilities. In 1982, Florida adopted an LLC act modeled on Wyoming’s LLC Act. Due to uncertainty over the tax treatment of LLCs, no other states introduced LLC legislation until after 1988. In 1988, the IRS issued a revenue ruling stating that it would treat a Wyoming-style LLC as a partnership for tax purposes. By 1996, nearly every state had enacted an LLC statute. The National Conference of Commissioners on Uniform State Laws
National Conference of Commissioners on Uniform State Laws
The National Conference of Commissioners on Uniform State Laws is a non-profit, unincorporated association commonly referred to as the U.S. Uniform Law Commission. It consists of commissioners appointed by each state, the District of Columbia, the Commonwealth of Puerto Rico and the United States...
adopted the Uniform Limited Liability Company Act
Uniform Limited Liability Company Act
The Uniform Limited Liability Company Act , which includes a 2006 revision called the Revised Uniform Limited Liability Company Act, is a uniform act , proposed by the National Conference of Commissioners on Uniform State Laws for the governance of limited liability companies by U.S. states...
in 1996 and revised it in 2006.
AOL
AOL
AOL Inc. is an American global Internet services and media company. AOL is headquartered at 770 Broadway in New York. Founded in 1983 as Control Video Corporation, it has franchised its services to companies in several nations around the world or set up international versions of its services...
was setup as a LLC during its ownership by Time Warner
Time Warner
Time Warner is one of the world's largest media companies, headquartered in the Time Warner Center in New York City. Formerly two separate companies, Warner Communications, Inc...
from 2001 to 2008. There is a similar setup for BMW
BMW
Bayerische Motoren Werke AG is a German automobile, motorcycle and engine manufacturing company founded in 1916. It also owns and produces the Mini marque, and is the parent company of Rolls-Royce Motor Cars. BMW produces motorcycles under BMW Motorrad and Husqvarna brands...
's American subsidiary, BMW of North America, LLC.
See also
- Gesellschaft mit beschränkter HaftungGesellschaft mit beschränkter HaftungGesellschaft mit beschränkter Haftung is a type of legal entityvery common in Germany, Austria, Switzerland, and other Central European countries...
(GmbH), a German form of the LLC - Besloten Vennootschap (BV), a Dutch private limited company
- Incorporation (business)Incorporation (business)Incorporation is the forming of a new corporation . The corporation may be a business, a non-profit organisation, sports club, or a government of a new city or town...
- Limited liabilityLimited liabilityLimited liability is a concept where by a person's financial liability is limited to a fixed sum, most commonly the value of a person's investment in a company or partnership with limited liability. If a company with limited liability is sued, then the plaintiffs are suing the company, not its...
- LLP
- Series LLCSeries LLCA series limited liability company, commonly known as a series LLC, is a special form of a limited liability company that provides liability protection across multiple "series" each of which is theoretically protected from liabilities arising from the other series...
- Types of business entity
- Uniform Limited Liability Company ActUniform Limited Liability Company ActThe Uniform Limited Liability Company Act , which includes a 2006 revision called the Revised Uniform Limited Liability Company Act, is a uniform act , proposed by the National Conference of Commissioners on Uniform State Laws for the governance of limited liability companies by U.S. states...
- Good standingGood standingA person or organisation in good standing is regarded as having complied with all his or its explicit obligations and having unabated powers to conduct his or its activities.-Businesses in the USA:...
- Test Approved