What is LLC? What Does LLC Mean? - IT-OFFSHORE
This abbreviation is common and usually we see after the company name. Sometimes you can see the variant with the separated points after each letter - L.L.C. There are also such variants, but less often - "ltd. Liability company", "limited liability co.", "Ltd. Liability co.". But what is LLC and what does LLC mean in company names?
Asked about what is LLC, some can answer that it is a corporate structure, according to which members can not be held personally liable for the debts or obligations of the company. LLC is essentially a hybrid company that combines the characteristics of a corporation and a partnership or an individual entrepreneur.
Each state has its own rules regarding the registration of LLC. It should be noted that not all jurisdictions offer this form of the company. So, for example, only in 2017 in the Cayman Islands it became possible to register LLC.
From the point of view of tax planning, the main feature of LLC is that in many countries it isn't a subject of corporate taxation. It is believed that all incomes of LLC immediately become the property of its participants. Each participant must include its LLC share of income in its total annual income and pay the corresponding income tax.
If the LLC members are residents of a jurisdiction where there is no income tax, LLC income is not taxed at all. Another mandatory condition for LLC tax-exempt status is the lack of income from sources in the country of registration. In some countries (for example, the USA) in order not to pay taxes, LLC also should not have an office on its territory.
Which jurisdiction is popular for the registration of LLC?
Of all jurisdictions, most often choose to LLC formation in the US. It is worth noting that some states have their own registration procedure. For example, in the case of LLC registration in Delaware, it is necessary to apply a registration certificate to the Delaware Secretary of State (DSS).
In Delaware, Limited Liability Company is a separate legal entity authorized to conduct business, acquire, retain and dispose of property, as well as to sue in its own name.
Management can be carried out by members or selected directors. As in the case of the LP, the relationship between members and the management structure is usually established in a written agreement. Such an agreement may provide for different classes of members and directors and their respective rights, powers and responsibilities. It can also establish a way to allocate profits and losses.
We hope that you know what is LLC and what does LLC mean in practice. If not, then you have the opportunity to find out the answers to all the exciting questions by contacting us for a free consultation!