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A limited liability company, or LLC, is a business structure that offers business owners several advantages over operating a sole proprietorship or a corporation. An LLC shields owners from most personal liability but does not require the payment of corporate taxes. The business owners simply report their share of company profits as income on their personal income taxes.

 

To form an LLC, you must file certain business-registration paperwork with your state, usually through the Secretary of State's office. Many states provide forms you can fill in to supply details such as provisions for management, ownership transfers, and profit and loss distributions. An attorney also can draft the paperwork if you need help.

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