An LLC is not a corporation; it is a legal form of company hat provides limited liability to its owners in the vast majority of United States jurisdictions. All's do not need to be organized for profit. [citation needed] Certain types of businesses that provide professional services requiring a state professional license, such as legal or medical services, may not form an LLC but use a very similar form called a Professional Limited Liability Company (PILL).

A Limited Liability Company (LLC) is a hybrid business entity having certain characteristics of both a corporation and a partnership or sole proprietorship (depending on how many winners there are). An LLC, although a business entity, is a type of unincorporated association and is not a corporation. The primary characteristic an LLC shares with a corporation is limited liability, and the primary characteristic it shares with a partnership is the availability of pass-through income taxation.

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It is often more flexible than a corporation, and it is well-suited for companies with a single owner. With Lou and Jose being a LLC they are essentially separating their personal assets from their business assets and if the business were to fail and not thrive only those sets obtained through the business and monies generated by the business can be used to satisfy a legal order of the courts. As a LLC there is no control issues within the organization because; the owners has all the authority. For U. S. Federal income tax purposes, an LLC is treated by default as a pass-through entity.

If there is only one member in the company, the LLC is treated as a "disregarded entity' for tax purposes, and an individual owner would report the All's income or loss on Schedule C of his or her individual tax return. Thus, income from the LLC is taxed at the individual tax rates. The default tax status for LLC with multiple members is as a partnership, which is required to report income and loss on IRS Form 1065. Liability issues concerning an LLC are sanctioned and separate which means the LLC assumes all the risk not the individual owners.

Lou and Jose must obtain a liquor license in the city and state of operations as well as compliance with statues concerning commercial business owners. All's must be compliant with the EBB Better Business Bureau. Frank the wealthy investor wants to open up a chain of exterminating businesses across the United States would be served best a an Cooperative or (Coop). A cooperative ("coop") or co-operative ("co-pop") is an autonomous association of persons who voluntarily cooperate for their mutual, social, economic, and cultural benefit.

Since Frank is endeavored into the field of exterminating; he must find like mind individuals to buy into his business plan. Frank would want to Join in the process of expanding the philosophy and getting others to buy in and new offices being setup nationwide because of demand for the service increasing. Control with a coop is shared and everyone has an equal voice in the decision making process. A cooperative is a business that is owned, financed, and controlled by the people, who use its services. Earnings are allocated and distributed to members based on patronage, rather than to investors based on equity.

The Internal Revenue Code (Code) recognizes the pass-through nature of a cooperative by providing for the single Federal income taxation of earnings generated on business conducted on a cooperative basis. First, cooperatives pay the special taxes assessed all businesses. These include real estate and personal property taxes, sales taxes, employment taxes to finance social security, unemployment compensation and workers' compensation benefits), gasoline and diesel fuel taxes, license fees, motor vehicle registration fees, and excise taxes on utility services.

Second, cooperatives and their owners pay a single income tax on margins, usually at the owner level. This is the same tax treatment applied to most U. S. Businesses. Shareholders of a cooperative enjoy limited liability for the debts and obligations of the business, including liability for the unlawful acts of other shareholders and employees. The laws and regulations operatives have to be in accordance with are(l) Filing Articles of Incorporation(2) Creating Bylaws(3)Creating Memberships(4) Conducting Charter Meetings and electing Directors and finally obtaining licenses and permits to conduct business.

Cooperatives have regulations and rules involving operations in accordance to The Cooperative Act of 1999. The Preamble states, An Act to provide for the formation and transformation of cooperatives as self-reliant, self-help, mutual-aid, autonomous, voluntary, democratic, business enterprises, owned, managed and controlled by embers for their economic and social betterment, through the financially gainful provision of core services which fulfill a common need felt by them, and for the matters connected therewith or incidental thereto.

Kava and Tara two recent grads in the field of obstetrics want to open a medical practice together. They plan on taking out a large loan to finance the start-up cost and finding a location. The entity the best serves their purpose would be a partnership. A partnership is an arrangement in which parties agree to cooperate to advance their mutual interests. The supplies and equipment needed to efficiently run a medical practice would be mutual in the purchasing aspect along with staffing. As far as taxation governmentally recognized partnerships may enjoy special benefits in tax policies.

Among developed countries, for example, business partnerships are often favored over corporations in taxation policy, since dividend taxes only occur on profits before they are distributed to the partners. Liability issues like malpractice are a concern and therefore should strongly be considered. Keep in mind that general partnerships offer no liability protection to the owners. The owners are legally considered the same as the business, and personal assets can therefore be considered business assets.