Limited Liability Companies, also known as Limited Liability Corporations or LLCs, are hybrid entities that are a cross between a partnership and a corporation. LLC owners are referred to as “members,’’ and those members can include individuals, corporations, other LLCs and foreign entities. LLCs can also have just one owner. LLC regulations vary by state.
LLCs provide the liability protection of a corporation and the tax efficiencies and operational flexibility of a partnership.
LLCs do not pay taxes on their profits directly. Instead, the profits and losses are passed down to members, who report them on their individual tax returns.
In California, an LLC must obtain local permits, as well as register through the Secretary of State’s office.
Cooperative Corporation (Worker Co-Op)
- Members are both workers and owners.
- The members control the structure and practices of the work environment.
- Obligations are limited to the company.
- Tax rules vary from state to state.