LLC or limited liability company is the most favorite business type in small and medium-sized organizations. The reason behind LLC being a favorite business type is because it keeps business owners free from formalities like other business types. Though, it provides limited liability protection for members.
LLC’s bypasses corporate taxation as it emphasizes the owner’s tax returns limited Liability Protection By forming an LLC, only the LLC is responsible for the debts and liabilities incurred by the business — not the members
Unless they run the business very sloppily, the owners (called “members”) of an LLC will not lose their personal funds or possessions over the LLC’s debts or lawsuits.
The profit of LLC go to the members directly who are reporting these profits as part of individual tax returns, that makes the business profit to be taxed once.
Other business models may find profits being taxed before being distributed to the business owners (called “shareholders”), and again as part of the shareholders’ personal tax returns.
LLCs can also be taxed as a C-Corporation, which is taxed separately from its shareholders, or as an S-Corporation, which is not taxed separately, so there are flexible options.
LLC requires far less paperwork compared to corporation. Also do not need to have huge board members and meetings. Even a single member can manage an LLC
As an LLC, members can develop a credit history that will make it easier to obtain loans or credit cards that can help build the business.