What is a primary benefit of forming a limited liability company (LLC)?
Practice Questions
1 question
Q1
What is a primary benefit of forming a limited liability company (LLC)?
Unlimited liability protection
Tax flexibility
Complex management structure
No formalities required
An LLC provides limited liability protection to its owners, shielding their personal assets from business debts.
Questions & Step-by-step Solutions
1 item
Q
Q: What is a primary benefit of forming a limited liability company (LLC)?
Solution: An LLC provides limited liability protection to its owners, shielding their personal assets from business debts.
Steps: 4
Step 1: Understand what an LLC is. An LLC stands for Limited Liability Company, which is a type of business structure.
Step 2: Learn about limited liability protection. This means that if the business has debts or legal issues, the owners' personal assets (like their house or savings) are protected.
Step 3: Realize the importance of this protection. Without it, owners could lose their personal belongings if the business fails or gets sued.
Step 4: Conclude that the primary benefit of forming an LLC is that it helps keep personal and business finances separate, providing security for the owners.
