A limited liability company company (LLC) has quickly become the go-to business entity for those looking for something easy to run, but still be provided personal liability protection. A major benefit for LLCs is the tax arrangement. An LLC itself does not pay taxes, instead the owners pay taxes on their ownership percentage of the LLC profits and their individual tax brackets; this avoids profits from being “double taxed.” Aside from the tax advantages, an LLC provides much more. Unlike requirements for executives in corporations, owners of LLCs are unrestricted by residency requirements and have a great deal of flexibility in sharing profits. Also, the formalities necessary to maintain an LLC are infrequent compared to corporations. An LLC isn’t ideal for every business though. If you plan on bringing on outside investors then an LLC is not preferred. Generally, owners of LLCs are unable to issue stock options to their employees with the same tax advantages as a corporation. It’s also impossible to “go public” as an LLC. As such, many institutional investors, like venture capitalists, have frameworks that don’t even allow them to invest in LLCs. Finally, it can be difficult and expensive to convert your business structure down the road so it’s important to make the right decision in the beginning.