What are the benefits to forming an LLC?

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Business Law FAQ

Q.    What are the benefits to forming an LLC?

A.    An LLC not only provides its members with the protection from individual liability, but also avoids the hazard of double taxation. An LLC, for tax purposes, is treated as a pass-through entity, and is not subject to federal income tax at the entity level. All items of income, gain, loss, deduction, and credit pass through directly to the owners of the business. The liability protection and pass-through tax attributes are very desirable to a sole proprietor and a limited number of members.

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