The LLC is the #1 Choice for Small Business Owners

   
Return to Limited Liability Company Home Page
 

What is an LLC and LLC Protection??


The two most common questions that new business owners have are "What is an LLC" and "What is LLC Protection and How Exactly Does an LLC Protect Me?" 
 

What is an LLC? 

An LLC is its own legal person separate and apart from its owners. So, when you create an LLC for your business, the LLC itself is the business.  You are not the business.  You are the person who owns the business. 
 
More about what is an LLC: The LLC is the actual person who customers do business with. The LLC is the person who enter into all of the business contracts. When the business is ready to hire employees, it is the LLC who is the employer and not you personally.
 
You are not the business. You are simply the owner of the LLC. So, when a customer, supplier, employee or any third party has a problem with your business, that person must deal with the LLC. If that person ever decides to sue the business, it must sue the LLC.
 
Accordingly, when one seeks to know what is an LLC, the important concept is that it is "separate" from its owners . . . it enters into business and acts on its own behalf. . . and it requires its own set of attributes that both the LLC laws and its owners give to the LLC.
 
 

What about LLC protection?

The LLC laws of every state specifically protect owners of an LLC from the LLC debts, obligations and liabilities. The laws generally state that a member (owner) of an LLC is not liable for the obligations of the LLC solely be reason of being a member.
 
This is the same protection afforded by corporations. The benefit of getting LLC protection through an LLC over a corporation is that an LLC affords LLC protection and provides more flexibility and simplicity than corporations.
 
Without an LLC, you would have no LLC protection from personal liability. If you did not use an LLC and ran your business as a sole proprietorship, then you would be personally liable for all business obligations.
 
If you are personally liable and are not protected by LLC protection, then you are subjecting everything you own to unnecessary risk.  If someone were to sue you and win in court, the court can take your assets (home, savings, cars, jewelry, investments) to pay off the judgment against you.
 
On the other hand, if you ran your business properly though an LLC, all lawsuit judgments would be against the LLC not your personally.  So, your personal assets will be protected from being taken to satisfy those judgments.
 
As you can see, LLC protection is the most important attribute to understand when learning about what is an LLC.
 
 

There are Exceptions to Limited Liability Protection

Now, most commentary on LLC liability would end here, business owners need to know there are important and relevant exceptions and conditions to LLC protection.
 
Our eBook, The Six Step LLC Formula for Limited Liability Protection, that comes with our LLC formation services, provides the necessary steps and requirements for you to ensure you use your LLC in the right way and minimize loss of LLC protection to avoid the piercing the LLC veil challenge.
 
As you learn about what is an LLC, I hope this gives you helpful information about how LLC protection works and its limitations.
 
Because of this great benefit, it is universally agreed by lawyers and accountants that businesses should always operate using a limited liability entity such as an LLC  for LLC protection. The costs are so low given the tremendous benefits!
 
Many think that lawsuits will not happen to them.  But the statistics prove otherwise.  Small business owners are prime targets for lawsuits including frivolous lawsuits!  The predatory litigation attorneys are out there. 
 
Don't become one of many small business owner victims who are in shock when they receive lawsuit papers after having not planned properly to protect themselves in their business.  Learn everything you can about what is an LLC and how to best preserve LLC protection in your business.
 
Learn How to Preserve LLC
Protection in Your Business in
6 Simple Steps


eBook Details
 
 
 
LLC Information at LLC Learning Center
Back to the Limited Liability Company Home Page
 
Interested in FREE Reprint Rights
or Unique LLC Content for Your Site-Click Here