Limited Liability Companies have become popular among small businesses because they infer both benefits of a corporation (i.e. protection for individual members) and a partnership (i.e. pass-through entity for tax purposes). This business structure offers the best of both worlds. The business entity is separate from the individuals, providing Member protection against traditional corporate liabilities, but the entity itself is not taxed, so owners/members only have to pay income tax.
Delaware LLCs operate on the same basic principles as other LLCs. However, Delaware LLCs are a bit more flexible in that Members may be, but need not be, Managers. These Managers take on no personal liability concerning the debts or obligations of the company. It is this form of LLC that has been adopted in Anguilla, making it a prime location to create an LLC and open a business.
Of course, there are plenty of benefits to be gained by Anguilla company formation. Here are just a few of the advantages Members will enjoy.
Asset Protection
The single best reason for Anguilla company formation as an LLC or any business structure for that matter is to protect personal assets from business liabilities. LLCs allow for the creation of a separate legal entity that bears the burden of liability. This, in turn, creates a legal shield for owners or members of the LLC that even lawsuits can’t penetrate (provided the company operates in a legal and ethical manner).
Pass-through Taxation
In some business structures, the company is taxed on profits and allowed to deduct losses. Employees then receive salaries which they are taxed on when filing personal income tax returns.
In other words, double taxation occurs. It’s a price many corporate entities are willing to pay for the legal protections that are part and parcel of operating as a corporation instead of a sole proprietorship or a partnership, just for example.
However, this is not the principle on which an LLC operates. In this type of entity, members are not only protected from liability, but pass-through taxation ensures single taxation by which profits pass through the business entity directly to members, who are then taxed on earnings.
Flexible Member and Management Options
Anguilla LLCs can have one owner or Member or many. Members can be Managers or not. In other words, Members have a lot of flexibility when it comes to the membership and management structure of the company.
Annual Requirements
Many corporate structures have a slew of requirements concerning recordkeeping, shareholder meetings, and so on. Whereas the Anguilla LLC is expected to keep financial records, there is no statutory requirement for an LLC to file financial statements with the Companies Registry. There is, however, a nominal annual government fee paid to ensure the LLC remains in good standing.