A limited liability company, or “LLC”, is an unincorporated business entity which is a cross between a corporation and a partnership. Like a corporation, an LLC protects its members from personal liability for the debts and obligations of the company. Like a partnership, an LLC is typically formed by the filing of a “certificate of formation” or similar certificate with the Secretary of State and is taxed like a partnership. Also like a partnership, the members of LLCs typically enter into an operating agreement which establishes how the LLC is managed. This agreement controls the management of the company and how the members relate to each other.
Where S Corporations have limits on the number of shareholders who also must be US residents, LLCs have no restrictions in these regards. This makes the LLC a particularly suitable vehicle for non-US residents. An LLC can have more flexibility in management because this is controlled by the Members Agreement not by the Business Corporation Act of the state.