A domestic limited liability company is a limited liability company or LLC that is created under the laws that govern a certain state in the US where the company operates.

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A domestic limited liability company is a combination business entity that takes the advantageous parts of other business types, mainly partnerships and corporations. There are many benefits to starting an LLC as a business owner.

As the name refers to, limited liability companies limit the financial liability of the owner or owners of a business to the amount of money they have invested into the company; however, there are a few exceptions.

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What this primarily means is that judgment holders and debtors can not go directly after the owner of an LLC for money that the LLC owes. For instance, if an LLC files for Chapter 11 Bankruptcy, the owner or owners of the LLC are not responsible for paying the LLC's debts with their money.

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However, if an owner of an LLC personally guarantees a loan is taken or another financial obligation for the LLC, they may lose their limited liability protection for that specific debt or the financial obligation.

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Many business owners start domestic LLCs because their tax status is flexible. You can often choose a tax status that works best for your specific LLC. There are a few different tax options in this area.

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Pass-through single taxation is one, or electing to be taxed at the LLC and individual level, similar to a corporation. LLCs also have a lot of flexibility concerning ownership, shares of assets and liabilities, and overall management of the LLC.

LLCs can typically have different kinds of owners. One option is to have managing members owners who also supervise the LLC's day-to-day operations, separate owners, and separate managers, or some combination of the two.

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In many states, owners who do not manage the LLC can be called "limited members" of their LLC; this means that they are more akin to outside investors whose only risk is losing their investment in the LLC.

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Because of their immense flexibility, LLCs are very popular and a great option for businesses of all sizes, from businesses with one owner to businesses with 100 owners or even more.

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When juxtaposed to corporations, LLCs are very simple to create, manage, develop, change, and operate. There are fewer requirements and formalities than those associated with a corporation.

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Corporations often require board meetings and lots of documents to take almost any kind of business-related action. They also usually require more extensive record-keeping than LLCs do. Many corporations have to enlist the help and professional advice of lawyers, sometimes many, to accomplish business matters, while this is not as frequent with LLCs.

Domestic limited liability companies are great choices for business owners of all types and make running their business simpler in terms of taxes and operations.