An LLC, or limited liability company, provides business operators the protections usually only afforded to corporations and the simplicity often only available to sole proprietorships. LLCs offer legal protection of personal assets and pass-through taxation through a separate entity that isn’t limited to a specific number of shareholders or heavy regulation.

That will entirely depend on your small business and its needs. If you are a freelancer or solopreneur, you may do fine with a simple sole proprietorship. But an LLC offers a number of advantages, such as protection as an individual from legal and financial problems that your company may face. LLCs also have more choices when it comes to the way they’re taxed. Be sure to do your research and get legal and tax advice before forming any sort of business.

If filed online, it may be possible to get your LLC formed in two to four business days. Otherwise, LLC papers submitted by mail often take two to several weeks to process.

While each LLC is required to have a registered agent, it is possible to act as your own agent or appoint an LLC member to the role. Otherwise, you may hire an individual or company to act as your agent.

It is common for multi-member LLCs to open joint bank accounts to which all members have equal access.

An LLC operating agreement is a document that determines business and financial decisions and key member roles. Some states require operating agreements before approving an LLC’s formation.

An LLC can own another LLC, and there are multiple ways to make this happen. When filing paperwork, a preexisting LLC may be deemed the owner of the new LLC. Alternatively, an LLC member may sell the entity to someone else. A series LLC is a tiered business structure where the topmost LLC owns the other lower-tiered businesses.

An LLC is owned by members, while shareholders own corporations. Corporations are often subject to additional taxes, while LLCs may be claimed on one’s personal tax documents.

An LLC isn’t legally required to have a physical address except for its registered agent, who accepts important documents such as tax papers or legal notices on behalf of the business.

It may be possible to have multiple businesses under one LLC if you set up the first entity as a holding company, after which future LLC ventures are held under the first LLC.