Jennifer Reuting

Individuals are now, more than ever, realizing the power of the limited liability company (LLC). If you’re like many people, you probably understand that an LLC can benefit you somehow; you just don’t know the next steps to take.Read on to find out the benefits of LLCs, get help naming your LLC, and get the lowdown on the different tax types for LLCs so you can make the best decisions for your business.

When a sole proprietor takes on one or more partners, a general partnership is born. Because a sole proprietorship by its very nature can be owned by only one person, there is no exception to this rule. Occasionally, smart entrepreneurs create a general partnership agreement among the partners. Like a sole proprietorship, no other paperwork is completed, and no filings need to be made for the formation to take place.

LLCs, or limited liability companies, are one of the most flexible business entities. They allow you to choose how to distribute the profits, decide who manages the business's day-to-day affairs, and decide how the profits are to be taxed. They also offer a lot in terms of liability protection. The overall advantages of the LLC include the following: Personal liability protection: Any creditors who come knocking or lawsuits filed against your business can't affect you personally.

Tens of millions of Americans operate small businesses. They range from small, home-based side businesses to fully operational companies with many employees. For the most part, these individuals operate without protection. Granted, they may not take what they do too seriously. They may consider themselves independent contractors or consultants, but in today’s litigious society, operating without even a basic level of liability protection is a bad move.

The Limited Liability Company (more commonly known by its acronym, LLC) is by far the most popular business structure. Only a decade ago, the LLC was the new kid on the block — untrusted and unverified. Luckily, that changed pretty rapidly — LLCs gained popularity and, within a short time, became firmly established in the business world.

A limited liability partnership is like a limited partnership without limited partners. An LLP has only general partners who are held personally responsible for the debts and obligations of the business. So how is this entity different from a general partnership, you ask? Well, an LLP has an added layer of liability protection that insulates the partners from the wrongful acts of the other partners.

Just because you own it doesn’t mean that you need to know what to do with it. Limited liability companies (LLCs) have a manager role — a person who handles the day-to-day operations of the company. All LLCs are required to have at least one manager. They can be the owners themselves or other outside persons or businesses.

Although limited liability companies (LLCs) are separate from their owners in a lot of ways, they still need to have them. An LLC without an owner is like a child without parents: It simply doesn’t exist. So, even though you may have called up a filing company and filed your LLC with the state, until you go through the process of doling out ownership in your LLC, it doesn’t become its own legitimate entity.