LLCs are popular because they provide several valuable advantages:
— LLCs can be governed informally. While corporation laws require management formalities (such as a BOD, meetings and quorums), LLCs are a lot more informal.
— LLCs have greater flexibility in deciding how to split their financial interests. An LLC can distribute its income to each member equally (based on capital contributions,) or in many other ways. A corporation distributes its income to shareholders on a per share basis.
— An LLC can be a pass-through tax entity without any of the restrictions imposed on corporations.
— In addition, LLCs do not have a residency requirement, they provide limited liability for business debts and obligations, and they can offer a great deal of credibility within the business world.