If you are looking to set-up a company, the business structure and formation, which the company will adopt is perhaps the most important thing you must consider. You might decide to establish a limited liability company based on your business plan and your personal requirements. The most important implication of a limited liability company is the fact that it safeguards your personal assets against financial risk. This means that if your limited liability company should ever face bankruptcy or any other financial instability, you only stand to lose the capital you initially invested in the business. In other words, your personal funds and assets cannot be used to settle any outstanding debts the company might accumulate in the future. Limited liability companies are in many ways like corporations. However, you should be aware that a limited liability company is more flexible in terms of its ownership and administration.
It is also important to understand that a limited liability company can file its taxes as either as a corporation or as a partnership. This fully depends on how you file the first taxes for your limited liability company. It is also worth mentioning that a limited liability company can select any mode of profit distribution it deems fit. This is quite different from a partnership where all profits have to be distributed on equal terms. If you intend to take your company public or to issue your employees with shares, then forming a corporate business structure and not a limited liability company is what you should consider.
