A limited liability company is generally known as an LLC in US and Private Limited Company in the UK. Limited Liability Company holders account business profit and loss on their income tax returns. By itself Limited Liability Company is not a separate taxable entity. The owners, of a Limited Liability Company, are sheltered from personal liability for business debts. In general, the personal property of the owner is free from company liability. It is now, very clear that why Limited Liability Company attracts the majority of small business owners.

By and large, business builds up debts and that generate the threat of being in to legal action. Without restraining ones personal liability, business or company owners would be fully legally accountable for the company debts. Therefore personal assets of the owners would be at risk. But in the case of Limited Liability Company, the creditors of the company can seek legal action only against the company assets not the personal assets of the owners of the company. In general creditors can't have the private possessions of the limited liability company owners. This might be the reason for people claiming Limited Liability Company owes the best feature of the corporate business structure and partnership. However, in certain circumstances both the owners of the company and shareholders loose the limited liability protection if they acted unlawfully, dishonorably and negligently.

Any individual, in many of the states or countries, can form a limited liability company with just one owner by filing an article of association with concerned countries LLC filing office. In UK it is companies House.

One doesnt need to go through either a solicitor or an accountant to form a Limited Liability Company. The information requisite for the articles of association is not only technical but also very simple and general. For filing the articles of association to company house, one needs the name of the Limited Liability Company, Address of the company office, names and addresses of the owners. In addition to that the name and address of the registered agent - usually one of the LLC members - either a person or a company on behalf of the Limited Liability Company that concur to acknowledge legal papers. Pradeep Achuthan, a senior management consultant says that it is good to have consultation with an accountant or solicitor to re check whether this is the right kind of form for the business you own and taking an expert review of the operating agreement. It is good to have an accountant for setting up the accounting system of the company, he added.

In some countries, the office asks the person to advertise or publish the intention to form a Limited Liability Company in a newspaper. Even though, the person who is forming an LLC not legally required preparing the operating agreement, is worth having it for legal references. The operating agreement will help one to understand and spell out the rights and responsibilities of the fellow owners or partners.

The operating agreement helps one to make certain that courts will value the liability protection by showing that the concerned have been meticulous regarding systematizing the Limited Liability Company. The agreement allows you to spells out the rules that oversee to share of profits, to take most important business choices, and the modus operandi for managing the change of members. Moreover, it helps individual to put off confusion among the owners over the company assets and administration. Senior management consultant Pradeep Achuthan says that by having an operation agreement, the owners are creating own rules and regulations for operating the Limited Liability Company rather than obeying government Limited Liability Company laws.

As this article hinted before, the Limited Liability Company is not measured as a detached body from its owners for tax purposes. The government will not ask income tax from the Limited Liability Company, or the Limited Liability Company doesnt need to pay income tax by itself. Instead of the Limited Liability Company, the owners pay income tax from their profits, if they have any. Here is the place where Limited Liability Company needs advice or helps from an accountant, says George Mathew, a senior accountant in London.

In general, the United Kingdom, Limited Liability companies are forced or compelled by law to uphold accounts of their associations at Companies House. A copy of this information is available for purchase. This is good and helpful for some one who wants to deal or trade with this kind of companies. Before providing goods and services on credit, by using this facility, creditors of the Limited Liability Company can assess the risks they are taking. This simple method sets a scale and balances the advantage of Limited Liability specified to the owners of companies.