The Limited Liability Company (LLC) structure is one of the most popular types of business entities because of how relatively simple and flexible they are to set up and operate. As a result, many smaller organizations gravitate to this structure. While the policies around forming and operating an LLC varies from state to state, certain critical factors remain constant.
The LLC provides its LLC owners with limited liability protection, and it typically does not pay taxes for itself. What typically ends up happening is that the net income or loss that the business generates is “passed through” to the personal income of the owner(s)/member(s), and is simply taxed as personal income.