mysterious abbreviation: L.L.C.

I have become aware of an abbreviation that many businesses have been slapping on the end of their company names, but I have no idea what it means. The abbreviation in question is: “L.L.C.” This seems to be applicable to almost any business, as I have seen it within such names as “Absolute Healthcare L.L.C.” or “Bill’s Plumbing L.L.C” and so on.

What is this “L.L.C.” and what is it’s significance in the business world?

I looked up “L.L.C.” in an online abbreviation dictionary, and it came up with “logical link control” however, I don’t think this is the meaning that corresponds with what I have been seeing within business names. If it indeed means “logical link control” what is that?

I would appreciate any input anyone has on this. In addition to message board replies, Email replies or instant message replies are welcome. Thanks, Teeming Millions!

It’s “Limited Liability Corporation,” and this question should be in the ‘general questions’ section of this message board.

Welcome.


Give me immortality, or give me death!

Limited liability corporation

Which it is. ‘Duh’ on me; I thought I clicked MPSIMS. Sad that you can’t tell much difference by the threads anymore …


Give me immortality, or give me death!

I did post my question in “General Questions,” Milossarian.

A situation that has not gone unnoticed by your humble moderators, BTW. We’re currently mulling over what, if anything, is a good response to this troubling trend.

Thanks, Milossarian. No problem.
I would appreciate someone explaining the significance and meaning of “limited liablity corporation” please, if you would.

Don’t mean for that to infer that you mods aren’t doing your job excellently, Manny. I am continually in awe of how this board stands head and shoulders above anything else that can be found out there. And I think that’s directly attributable to the job you folks do.

Magical, I don’t think the LLC term is a new trend.


Give me immortality, or give me death!

CHOOSING THE BUSINESS LEGAL STRUCTURE:

LLC Advantages:

Limited personal liability for the owners (like a corporation and unlike a partnership).

No Federal taxes (like a partnership).

No limit on the number of stockholders (unlike an S-corporation).

More than one class of stock is permitted (unlike an S-corporation).

Business losses may be deducted on your personal tax return (like a S-corporation).

LLC Disadvantages:

Legal assistance is required to set up. The paperwork is complex.

No “continuity of life” as in a regular corporation. The LLC dissolves if one of the owners dies or otherwise leaves. However, other formal agreements between the owners can overcome this.

Some states require than an LLC have more than one member.


jrf

Damn nice of you to say so, Milossarian, but it has been mundane in here for a bit. It may be cyclical; if it seems to be secular we’ll have to act.

At any rate, LLC is fairly new in terms of prominence. Essentially, it is an evolution from partnerships, but heck if I can remember exactly how, MSK. I think there must have been a change to allow the tax structure of traditional partnerships to LLCs while limiting the liability of the owners. I do know that almost all “partnerships containing personal corporations” (law and accounting firms, doctors, etc.) seemed to go from Partnership to LLC in the span of about a week a couple of years ago.

I’ll cogitate overnight for you, and if someone doesn’t have a complete story by about this time tomorrow, I’ll give it a go.

Or JonF can post immediately in front of me, making my thinking about it overnight unnecessary.

Good show, dude.

A question I (sort of) know the answer to, but someone is borrowing my business law book right now because he is trying to set up a Limited Liability Corporation (LLC). So I unfortunately don’t have the exact details of the advantages.

The reason one forms an LLC, or ANY kind of wierd corporate structure is generally two fold: protection and tax advantage.

With a sole proprietorship or partnership, one has little on the protection side. That is, if you slip and break your spine in Skippy’s Flower Shop, you can sue the shop, and if the expenses go beyond what the business is worth, you can go after Skippy’s PERSONAL assets as well (that is, his house, car, bank account, etc.)

With Skippy’s Flower Shop, LLC, however, in this same scenario, once you drain the shop of all it’s assets, that’s it. Skippy’s personal assets are protected. On the downside, however, Skippy’s corporation gets taxed at the corporate rate. Then he pays himself a salary, which he ALSO must pay personal income tax on. That is…double taxation. So that protection comes at a steep price. In the previous example, the sole proprietorship or partnership only taxes the individual owners on their personal income taxes.

Before 50 lawyers chime in though, I should add that this is an overly simplified analysis and it will no doubt lead you to ask why one might chose to be an LLC over say a C-Corporation or S-Corporation, or even a Limited Liability Partnership (LLP) - In fact, most law firms are set up as LLPs. Again, the protection and taxation issues apply. The other issues with many of these other types of entities has to do with the ability to raise capital and corporate control (i.e. who has the power to change things or determine how money is spent.)

If you’re really interested in the subject, I’d recommend a book called “The Entrepreneur’s Guide to Business Law” which is a great reference for anyone thinking about setting up their own business IMHO.

Thankyou everyone for solving this mystery for me. I now understand why LLC is so prominently displayed.

They’re also my initials: Luke L. Chao :slight_smile:


``You’re just an empty cage girl if you kill the bird.’’ – Tori Amos.