What is an LLC? Everything You Need to Know in 2025

1. Introduction

The United States remains one of the most attractive countries for both domestic and international entrepreneurs looking to expand their businesses. A Limited Liability Company (LLC) is one of the most versatile legal structures to operate in this global market.

In this guide, you'll learn what an LLC is, its key benefits, and how to easily create one in 2025.

2. What Is an LLC?

An LLC (Limited Liability Company) is  is a recognized business structure in the U.S. that combines:

✅ The asset protection of a corporation.
✅ The operational flexibility of a partnership.

One of the most important features of an LLC is that it separates personal assets from business liabilities. This means that, in case of debts or lawsuits, your personal wealth remains protected.

📌 For more information on legal structures, check out: Differences Between an LLC and an INC in the United States.

3. Why Open an LLC in the United States?

1. Tax Optimization and Pass-Through Entities

LLCs are considered pass-through entities, meaning that the income generated by the business is reported on the personal tax returns of its members instead of being taxed at the corporate level.

✅ Benefits:

‍✔️ Reduces taxes in many cases.
✔️ Simplifies tax management.

The tax classification of an LLC depends on various factors, including the number of members and tax elections made. According to IRS (Internal Revenue Service) rules, an LLC can be classified as:

1. Disregarded Entity: For single-member LLCs.
2. Partnership: For multi-member LLCs.
3. Corporation: A corporation is a type of business managed by a board of directors elected by its shareholders. Choosing a corporation can be an excellent strategy for companies aiming to optimize their tax structure and maximize long-term growth.

This flexibility allows owners to optimize taxation according to their unique situations. To learn how to optimize taxes based on the state where you register your LLC, visit:‍ Best States to Start a Business in the U.S.

2. Increased Profits:

By reducing the percentage of income spent on taxes, businesses can retain more profits for reinvestment, hiring, or infrastructure improvements. For startups and emerging businesses, this can be the difference between rapid growth and stagnation.

3. Access to the U.S. Market:

Forming an LLC grants access to one of the largest and most stable economies in the world. It facilitates international operations and enhances your company’s credibility by operating under a U.S. legal structure. Many Latin American businesses use LLCs to establish international operations without physically relocating.

4. Flexibility in Management and Operations

LLCs allow owners to create custom internal rules without requiring formal board meetings or complex corporate structures. This makes them ideal for startups, small businesses, and freelancers looking for simpler administration.

4. Who Should Consider Forming an LLC?

1. Businesses Looking to Expand and Increase Profits:

• Companies seeking a tax-friendly environment.
• Businesses managing exports, international transactions, or digital services, reducing fiscal and administrative costs.

For details on how to form an LLC as a foreigner, visit: How to Start a Business in the U.S. as a Foreigner.

2. Entrepreneurs:

• Individuals wanting to protect personal assets while running a profitable business.
• Those aiming to expand internationally without legal complications.

3. Small and Medium-Sized Enterprises (SMEs):

• Family businesses or companies with multiple owners seeking simplicity in management and operational flexibility.
• Businesses looking to reduce tax burdens compared to operating exclusively in high-tax countries.

4. Foreign Investors:

• U.S. citizenship or residency is not required to form an LLC, allowing international investors, especially from Latin America, to easily enter the U.S. market.
• Those who need to protect their investment while diversifying the revenue streams.

5. Steps to Create an LLC in the U.S.

1. Choose Your LLC Name

The first step is to select a unique name that meets the legal requirements of the state where you will register your LLC.

Requirements for Your LLC Name:

✔️ Must Be Unique: Check availability in the state's business name database.
✔️ Must Include “LLC” or “Limited Liability Company” to identify it as a Limited Liability Company.
✔️ Must Not Infringe on Trademarks: Ensure the name is not already protected by copyright or trademarks.

2. File the Articles of Organization

he Articles of Organization are legal documents that officially form your LLC. This process is completed with the Secretary of State in the chosen state.

Information Included in the Articles of Organization:

✔️ LLC Name
✔️ LLC Address: Can be a physical or virtual address, depending on the state.
✔️ Registered Agent Name & Address
✔️ Business Purpose: A brief description of business activities.
✔️ Names of Members or Managers: Optional in some states.

3. Obtain an EIN (Employer Identification Number)

The EIN (Employer Identification Number) is issued by the IRS (Internal Revenue Service) and serves as the tax identification number for your LLC.

Why Do You Need an EIN?

✔️ To Open a Business Bank Account
✔️ To Hire Employees
✔️ To Comply with Tax Obligations

4. Open a Business Bank Account

Having a separate bank account for your LLC is essential to:

✔️ Maintain Limited Liability Protection
✔️ Manage Business Finances Efficiently

5. Comply with Legal and Tax Obligations

Once your LLC is officially formed, you must ensure compliance with state and federal regulations to keep it active and in good standing.

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6. Frequently Asked Questions About LLCs

• Can a Foreigner Open an LLC?
  Yes! LLCs allow non-residents to start a business in the U.S. without needing a visa or Green Card.

• Are LLCs for small businesses only?
  ‍Not necessarily, this type of company is stipulated for small and large companies

• Do I need to have an American partner to create an LLC?
  The partner (s) of an LLC may be foreigners. There is no requirement that LLCs have at least one American partner.

• Can I register an LLC as a single member?
  ‍Yes! An LLC can be formed by a single person, which is very common for this type of company, as it protects the assets of this partner against any commercial debt.

Not sure where to start? Contact us, and we’ll guide you step by step.

7. Conclusion

An LLC (Limited Liability Company) is a business solution offering flexibility, legal protection, and tax accessibility, making it an ideal option for domestic and international entrepreneurs. If you’re considering forming an LLC, don’t go it alone. Our team is here to help you at every step of the process.

Schedule a free consultation and expand your business into the U.S.!