What is an LLC? Limited Liability Company Definition
An LLC is a “limited liability company,” defined as a type of company that can either decide to be taxed as a corporation or as a partnership. This is the major advantage of an LLC; it offers some of the limited liability of a business, while still being flexible for tax purposes. The downside of an LLC is that it can lead to self-employment taxes, should the partners elect to be taxed on a pass-through level.
An LLC is going to require a set of articles of organization, which will outline how the LLC itself is structured. The LLC will also need to get a business license from the state that it’s registered in, as well as an EIN (Tax ID) Number. An EIN Number is used when the LLC opens a business bank account, pays taxes, and (importantly) hires employees. An LLC’s EIN Number can be obtained online in under an hour, or also available to apply through the mail, through fax, or via phone.