Chapter 2

LLCs: More Handy Than Duct Tape!


Bullet Harnessing the power of LLCs

Bullet Understanding LLC limitations

Bullet Recognizing the different LLC types

Years ago, in the first edition of this book, this chapter was broken down into two parts: advantages and disadvantages of LLCs. Since then, everything has changed. LLC has become a household name, and legal precedents have been set — you no longer have to be the “test dummy” (pun intended) should your LLC get dragged into court, unsure of how your case will be decided. Also, state governments and the Internal Revenue Service have loosened the restrictions that LLCs used to be burdened with, now making it by far the most flexible of all business structures.

Long story short, whereas the “disadvantages” section used to take up a full five pages, it is now reduced to a measly few paragraphs. Now, an LLC is not the best option in only a very few circumstances. In this chapter, I give you a rundown on all the major qualities of limited liability companies — the good and the bad.

Because everyone’s needs differ drastically, I’ll let you decide for yourself which facets are benefits and which are drawbacks for your situation. (In

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