1. Pass-Through Taxation LLCs allow for pass-through taxation. This means that earnings of an LLC are taxed only once. The earnings of an LLC are treated like the earnings from a partnership, sole proprietorship and most S corporations.
2. Limited Liability The LLC owner’s liability is generally limited to the amount of money, which the person has invested in the LLC. Thus, LLC members are offered the same limited liability protection as a corporation’s shareholders.
3. Flexible Management Structure and Flexible Ownership is Permitted Like general partnerships, LLCs are generally free to establish any organizational structure agreed on by its members. Thus, profit interests may be separated from voting interests