Limited Liability Companies

A limited liability company (hereinafter referred to as LLC) is a trading company with legal personality status. Typically, an LLC's equity is made up of the total face value of its equity interests. One of the main characteristics and advantages of an LLC is the fact that shareholders cannot be held personally responsible for the debts or liabilities of the company - only the company's assets are at risk. However, the issue of limited liability also depends on the national legislation of the relevant jurisdiction. In general, an LLC is a corporate structure that combines the simplified taxation of a partnership with the limited liability principle of a corporation. It can be the perfect solution for an international trading company, provided the jurisdiction is well chosen.

A key difference between a public company and an LLC is that the latter is always a closed company and its shares are not publicly traded. Internationally, another common name for an LLC is a private liability company, or simply "Ltd". This term is widely used in the UK and some other common law countries.

Choosing the right legal form for your business can be critical in terms of tax planning, profit sharing and cost reduction. There are some key differences between them, and each has its own advantages and disadvantages depending on the case. Therefore, effective business planning prior to founding is essential.

Limited liability company functions
There are no special circumstances in which you would be required to set up a limited liability company. An LLC is a type of legal person that successfully combines most of the most desirable attributes of other types of businesses, which explains why most entrepreneurs choose an LLC when starting a business. In addition, there are simplified accounting and record keeping requirements for LLCs in many offshore jurisdictions.

Typically, we would recommend that our clients consider an LLC as a viable option if they want to start a trading company or small business within certain limits. LLCs are perfect for those looking for a way to run a business (local or international) and distribute profits with minimal cost. However, you should always keep in mind that an LLC typically does not provide an effective mechanism to induce a partner with limited voting power or large numbers of investors into your business. In these cases, we encourage you to consider a limited partnership or a public company, as these may be more effective ways to achieve your goals. Starting an offshore company in a tax haven can be a great way to cut maintenance costs.

Advantages and disadvantages of a limited liability company
Like any other legal entity, the LLC has its own advantages and disadvantages. Depending on the circumstances and your chosen jurisdiction, there may be other specifics besides those listed below. For this reason, we recommend that you consult our lawyers before starting the formation process.

http://www.confiduss.com/en/services/incorporation/structure/limited-liability-company/
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