If you are starting a business and are not sure what standard you should base it on, corporation or partnership, then there is another option worth checking out. You may have seen the initials LLC, which stands for "limited liability company." Many business owners feel that it takes the best of both of these standards and combines it into one entity.

The benefit of a partnership is being able to pass both losses and profits to the owners without causing the company itself to be taxed, while the benefit of being like a corporation will protect you from personal liability.

LLCs are on the rise, as more and more company owners are discovering the savings, flexibility and liability protection it offers.

With a smaller company it allows for the avoidance of personal liability, but at the same time, if the venture is not ready to be incorporate, then it is an ideal structure.

You may want to explore some of the advantages and disadvantages of forming a LLC. Most state regulations concerning the formation of this type of
business do not reflect the more recent taxation changes and it can be quite a bit more expensive to form this type of company, versus a partnership or
sole proprietorship.

However, individuals have a limited amount of personal liability, the profits and losses have a different allocation and the IRS will now allow you to choose between being taxed as a corporation or as a partnership.

In recent years, all 50 states have adopted limited liability company laws, offering a very attractive alternative that most small enterprises, including
the smallest home-based ventures, should consider. Even with all of the paperwork and at times, expenses involved, it is considered an ideal structure.

To review, a limited liability company is generally owned by its members (member managed) who may appoint managers (manager managed) to directly manage the business for them. The members may also apportion or hand out the duties among themselves as they wish and at times may appoint one of the members as president or vice president.

Most often, a state will allow a limited liability company to structure the enterprise in any way they see fit.

Perhaps the most notable vehicle to come about in the business industry is the LLC, or Limited Liability Company.

Many assume that it is a never-before-heard-of practice but in reality merchants, financiers and others related to the business industry have been looking for ways to reduce or eliminate their losses for years. So, to form a limited liability company may not be exactly a new concept, yet it is still quite appealing.

You may think that with all of the advantages an LLC business offers it must be a fairly difficult and expensive endeavor. However, you would be wrong, as most experts say that with all of the LLC information available, the process is much easier and less expensive than forming a corporation and it just may be the best decision you have ever made.

One of the first steps to be completed is to name your company; be sure to check with your state to see if your choice complies with your particular state's LLC rules.

Some of the more common rules are obvious, such as making sure there is not another LLC on file with the same name. Of course, since you are going to form a limited liability company, the name must end with an LLC designator such as "Limited Liability Company" or even "Limited Company" or an appropriate abbreviation, such as "LLC" or "Ltd. Liability Co." Most states have certain words that are prohibited, such as Bank, Insurance, City, etc.

Of course, as with everything else, there are some disadvantages as well. Corporations can be around forever, whereas an LLC business is dissolved when a member dies or undergoes bankruptcy.

A sole proprietorship or partnership is a little less complex and includes less paperwork than a LLC, yet that certainly does not mean that the paperwork is not worth the effort.

When you are ready to form a limited liability company, be sure to check with your state to see what type of requirements may be necessary. While it does vary from state to state, some of the information is pretty universal.

Most require filing an Articles of Organization, which basically is a summary of your business. You will be asked to choose a company name and the Secretary of State will give you the guidelines for doing so. As well, you will be asked to state the purpose of your company.