Definition of a Limited Liability Company

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The definition of a limited liability company, known as an LLC, is a group of individuals who apply to be on their own, not pay tax and divide losses or profits equally among the partners. Understand how an LLC works with information from a portfolio manager in this free video on business strategies.

Part of the Video Series: Business Strategies
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Video Transcript

Are you considering starting up your own company and wondering what format that company should take? Hi this is Roger Groh at Groh Asset Management. Today we're here to talk about Limited Liability Corporations or LLCs. What do they really mean? Well an LLC is a group of individuals who have come together, formed a partnership because technically that's what you are if you own part of an LLC. The limited liability corporation on it's own will not pay tax. Any loses or profits will be divided equally among the partners depending upon the percentage of the LLC that they own. There may be limits on the number of partners that you can put into an LLC though. You may want to review that carefully with your lawyer to determine what that format offers. Last, each state is likely to charge you the LLC, a fee for doing business in another state so be very careful about the overall cost of operating an LLC. Hope that helps, may the profits be with you, I'm Roger Groh with Groh Asset Management, thank you very much for spending time with me.

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