For Subscribers

Take Cover

More and more closely held companies are getting cozy with the LLC, but is a limited liability company right for you?

By C.J. Prince

Opinions expressed by Entrepreneur contributors are their own.

For the LLC, it's been a relatively long road to popularity. When the limited liability company first appeared in the '70s, the tax and legal rules governing it were too confusing and onerous to make it an attractive option. In the '90s, after the IRS both clarified and simplified some of those rules, businesses began cautiously considering it.

Today, closely held companies are beginning to show a clear preference for the LLC, according to the latest data from the International Association of Commercial Administrators. LLC filings jumped in almost every state from 2004 to 2005, while corporate filings declined. "The tax benefits are becoming more clearly understood, the legal protection is there and people are getting more comfy [with the LLC]," says Dan Meehan, tax partner with New York City's J.H. Cohn. "And there are a lot of practitioners who didn't really understand LLCs and are now getting more familiar with [them]."

Continue reading this article — and all of our other premium content with Entrepreneur+

For just $5, you can get unlimited access to all Entrepreneur’s premium content. You’ll find:

  • Digestible insight on how to be a better entrepreneur and leader
  • Lessons for starting and growing a business from our expert network of CEOs and founders
  • Meaningful content to help you make sharper decisions
  • Business and life hacks to help you stay ahead of the curve

Related Topics

Editor's Pick

The Dark Side of Pay Transparency — And What to Do If You Find Out You're Being Underpaid
Thinking of a Career Change? Here Are 4 Steps You Can Take to Get There.
A Founder Who Bootstrapped Her Jewelry Business With Just $1,000 Now Sees 7-Figure Revenue Because She Knew Something About Her Customers Nobody Else Did
Everything You Need to Know About Franchise Law
Starting a Business

90% of Online Businesses Fail in Just 4 Months. You Can Avoid the Same Fate By Using These Strategies.

It's not catastrophizing when we think about potential failure; it's in fact a chance for any business to precisely see any outcome and prepare in advance.

Real Estate

4 Essentials for Selecting the Perfect Business Real Estate

Marketing for retail, restaurant or other site-critical companies should always begin with meticulously chosen sites: Time-tested ways of picking a winner.

Business News

'Crying Northwestern Kid' Turned His Viral Fan Moment Into a Successful Harvard Admissions Essay. He Says the Experience Taught Him About Empathy.

Six years ago, Phillips was watching No. 8 Northwestern take on No. 1 Gonzaga during March Madness when he became a meme.

Business News

A Scammer Posing as Elon Musk Tricked a Florida Principal into Sending $100K in School Funds: 'I Fell for a Scam'

Dr. Jan McGee has since resigned as principal of Burns Science and Technology Charter in Oak Hill, Florida.

Marketing

What Is a Brand Personality? Here's How to Develop One.

Connect with your audience on a deeper level by giving and cultivating your brand a personality. Read here how to do so.