Characteristics of a Limited Liability Company or LLC:
- It requires the filing of documents with the Secretary of State to be authorized.
- It may have one or more owners called members.
- It can be member-managed, or manager-managed.
- All members have limited liability.
- Profits and losses flow through to the members according to the operating agreement, their capital accounts, or local law which is generally proportional to their contributions.
- If the LLC elects tax treatment under Sub-Chapter S of the Tax Code, then the member can divide their come between salary and income from participation in the profits and losses of the LLC, and that way save significant money on social security and retirement payments. However, this election is not available if the LLC has foreign residents as members.