Entrepreneurs in Colorado might be interested in learning more about limited liability companies, as described by the U.S. Small Business Administration. This business structure provides owners with the advantages of running a corporation as well as the benefits associated with partnerships. The LLC possesses the flexible operational capacity of partnerships and the tax efficiencies realized by U.S. corporations. The people in an ownership position over an LLC are referred to as members.
Corporations, other LLCs, individuals or multiple individuals may serve as members of an LLC. Members report the profit and loss realized from the LLC on their personal tax return, similarly to a partnership. In contrast, shareholders typically file their investment in any corporation as a separate entity. The profit and loss of an LLC essentially passes through the enterprise to each of the members. The specific requirements for forming an LLC are usually governed by the state where the business originated or currently operates.