What is a Domestic Limited Liability Company?

When you are planning to start a new business, there are several business entities to choose from. If you are a professional, such as a doctor, you must form a professional corporation and be licensed. Other businesses might consider a C corporation or an S corporation. Or, you might decide to start a domestic limited liability company.

In this article, we find out what is a domestic limited liability company and more about this type of legal business entity.

What is a Domestic Limited Liability Company?

So, ‘What is a domestic limited liability company?’ A domestic limited liability company is a legal business entity that is a cross between a partnership and a corporation, where you are financially viable for the business except for the funds you have invested personally. There are particular requirements to the structure. You must be registered with the state, and receive Articles of Organization officially registering your business as an LLC.

The domestic aspect of an LLC refers to the business operating in the state in which it is registered. In this state, it is a domestic limited liability company and for all other states, the business is viewed as a ‘foreign’ limited liability company.

What is the Difference Between a Domestic LLC and a Foreign LLC?

A domestic LLC is registered with the Secretary of State in the state in which the business operates. You can file a foreign LLC in any state, it doesn’t have to be in the state where your business operates.

Domestic LLC vs Foreign LLC

The advantage of a limited liability company is that your personal assets are protected. For example, if your business folds, your house cannot be seized for repayment and your losses are only related to the investments you have made in the business. Another example would be if you are sued your personal assets are protected.

An advantage of a foreign LLC is that you can select the state you prefer to be registered with. This may or may not be due to taxes or laws for that particular state. 

How do you Create a Domestic LLC?

You can form a foreign or domestic limited liability company yourself, but you will need to do some research to ensure you complete everything you need to do. The Legal Stepz Limited Liability Company course is a cost-effective way to form your domestic LLC. By following the workbook and accompanying video, you can easily form your LLC. Alternative options include online formation companies and hiring a formation attorney, which can be costly and time-consuming.

Final Word: What is a Domestic Limited Liability Company?

In this article, we discussed ‘What is a domestic limited liability company?’ It is a legal business entity which means the owner is limited to only financially liable for the financial assets they invest in the business and their personal assets are protected. It is a business setup that is a cross between a partnership and a corporation. A domestic limited liability company is registered with the Secretary of State for the state in which it operates.

If you would like an easy and affordable option for forming your domestic limited liability company, where you form your company yourself, then consider the Legal Stepz limited liability company course. It covers everything you need to know about incorporating your domestic LLC.