Limited Liability Companies (LLC's) have only been recognized in the United Stated by the Internal Revenue Service (IRS) since 1981. Since then, over 36 states have enacted LLC legislation. LLC's are thought to be a preferred business form because they combine the best advantages of both Corporations and Partnerships. In an LLC, the owners receive the corporate benefit of limited liability as well as the tax advantages of a Partnership. Beverly-Killea Limited Liability Company Act was designed to assist in forming and operating small, closely held or operated businesses. It also offers a structure that is enticing to larger, more complex business ventures. Advantages are: Personal assets are protected from business debt. LLC's allow you to pass through the business income or loss to the personal income tax returns of the owners. Flexibility in managing and organizing business. Less paperwork compared to corporations. LLC's are good business structures for foreign investors because they do not have the same restrictions as S corporations. Disadvantages are: Not recognized in all states. California has no case law to rely upon for guidance in interpreting the act. A definite ending date must be provided. Usually 30 years.