Your business, whether small or large, could benefit from being operated in a limited liability company (an LLC). LLCs provide the liability protection similar to a corporation, while offering the benefit of not having to be concerned about state compliance issues like holding meetings and keeping minutes. LLCs are best suited for businesses that operate as a small business, may take on friends and family investors and want to keep things simple.
Limited Liability Company
An LLC may not be right for your business if you’re a start-up, or if you have plans to take on venture capital or private equity funding. It may also not be suitable, at least in California, if annual revenues are expected to exceed $250,000, as the State of California charges an entity-level tax at that level.
An LLC may also provide you and your partners flexibility in tax and profit distribution planning; corporations are more limited in that regard.
All in all, the LLC is a good place to start when thinking about which entity to choose for your small business.