What is LLC?

What is LLC?

A Limited Liability Company (LLC) is a corporate structure, that has many advantages. LLC allows its members not to be personally liable for debts and obligations of the company, as provided for in the case of the corporation. This happens, for example, if you want to register an LLC in the USA or to open an LLC in Canada.

Interesting features of LLC activities in some US states. If you intend to open a business in the USA, our company draws your attention to the following: one of the local shortcomings is that all 50 states are not uniform in the tax approach to LLC. Some states, such as California, limit the number of types of businesses, that can operate as LLC, and in Texas the tax approach to LLC is comparable to IBC.

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If we talk about territories, the most profitable decision is to open an LLC in Delaware or to establish an LLC in Wyoming

However, like partnerships, LLC expenses and revenues go directly to its members. Profits and losses of this type of company are calculated annually. This means, that any profit or loss is determined at the end of the calendar year. If, for example, a company loses 50 thousand per year, then these 50 thousand are distributed among all members equally, and they subtract this amount from annual profits. If the LLC has 50% profit for the year, members add this share to their income.

According to experienced YB Case team, if an LLC is established in a foreign jurisdiction, it provides an excellent asset protection, as this may prevent creditors from accessing certain information, as well as hindering them in litigation. In addition, an LLC, established in a foreign jurisdiction, can provide you with much easier access to credit in this territory.

LLC has a very flexible management structure, so LLC members can participate in managing the business without jeopardizing their limited liability.

If a member of the LLC dies or becomes bankrupt, the LLC ceases to exist

Registering an LLC in the jurisdiction, in which you plan to conduct a business, will make your business operations and obtaining a loan much easier for all participants. Most often, YB Case customers prefer to open an LLC in the United Arab Emirates or to register an LLC in Singapore. And, although, in different jurisdictions you have a different abbreviation of LLC (you can register a company in Singapore with the abbreviation PTE - a private company with a limited liability, and in Malaysia - with the abbreviation SDN), the essence of this will not change.

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Another advantage of the LLC is that owners may claim tax losses in excess of their investment, for example, in respect of certain real estate investments, using borrowed funds.

The ultimate advantage of the LLC is that it does not issue shares, which means, that it does not have shareholders, to whom it must answer. In addition, these shares cannot be seized in court, which, in fact, can lead to the transfer of ownership to a third party.

If you are looking for a way to preserve assets and protect against litigation, LLC is a very pleasant way out, as income/expenses flow from the company to its members.

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