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law:limited-liability [2026/07/21 08:31] – [Limited Liability] Humphrey Boa-Gartlaw:limited-liability [2026/07/21 19:37] (current) – [Corporations & Limited Companies] Humphrey Boa-Gart
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 ====== Limited Liability ====== ====== Limited Liability ======
  
-In the wacky world of business law, **limited liability** is a precedent-hardened legal status that protects you from lawsuits & damages incurred by a business entity you are a member, owner or shareholder of. It also protects said business entity from lawsuits & damages incurred by other owners or members. Corporations and their shareholders have a form of limited liability which forms that backbone of international business law.+In the wild world of business law, **Limited Liability** is a precedent-hardened legal status that protects you from lawsuits & damages incurred by a business entity you are a member, owner, partner or shareholder of. It also protects said business entity //(and its compartmentalized assets)// from lawsuits & damages incurred by other owners or members, or even yourself. Corporations and their shareholders have a form of Limited Liability which makes up a major backbone of international business law. 
 + 
 +However, not all business entities nor their owners enjoy Limited Liability status. Most small businesses are unregistered or barely registered, a type of business known as a **d/b/a** or //"Doing Business As"//. These d/b/a's, as well as most basic partnerships, do not have Limited Liability. This means one badly placed legal fiasco can bankrupt everyone involved.:psyduck: 
 + 
 +A **Limited Liability Corporation** //(also known as an **LLC**)// is a type of hybrid business entity in the United States //(with rough equivalents in many other countries)// which goes through a formal incorporation process specifically designating it as an LLC. The specifics of this process vary by state, but they usually want information about your company, what it does, where you do it, how to contact a representative of your company in person if ever necessary, and of course some processing fees. The final result is a business entity that is laid-back like a d/b/a, but enjoys some of the same Limited Liability benefits & pseudo-personhood that a full-fledged corporation has. 
  
-However, not all business entities nor their owners enjoy limited liability status. Most small businesses are unregistered or barely registered, a type of business known as a **d/b/a** or //"Doing Business As"//. These d/b/a's, as well as most basic partnerships, do not have limited liability status. This means one badly placed legal fiasco can bankrupt everyone involved. 
  
-A **Limited Liability Corporation** //(also known as an **LLC**)// is a type of business entity in the United States //(with rough equivalents in many other countries)// which goes through a formal incorporation process with the state. The specifics of this process varies by state, but they usually want information about your company, where you do business, how to contact a representative of your company in person if ever necessary, and of course some processing fees. The final result is a business entity that is laid-back like a d/b/a, but enjoys some of the same limited liability benefits & pseudo-personhood that a full-fledged corporation has. 
 ===== Types of Limited Liability ===== ===== Types of Limited Liability =====
  
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 ==== Limited Partnerships ==== ==== Limited Partnerships ====
  
-Partnerships can have various forms of limited liability status, again depending on locale. In the United States alone, there are multiple flavors of the Limited Partnership (LP), including but not limited to Limited Liability Partnerships (LLP), Limited Liability Limited Partnerships (LLLP), and even Publicly Traded Partnerships (PTP).+Partnerships can have various forms of Limited Liability status, again depending on locale. In the United States alone, there are multiple flavors of the Limited Partnership (LP), including but not limited to Limited Liability Partnerships (LLP), Limited Liability Limited Partnerships (LLLP), and even Publicly Traded Partnerships (PTP).
  
-Since a Limited Liability Company can have multiple people involved much in the same way as a Partnership //(also known as a **multi-member LLC**)//, these are rarely started by the first-time business owner. Those who need something more complex than an LLC are usually inclined to upgrade to a Corporation from here //(see below)//. However, some people hold the arcane knowledge necessary to extract some major overhead savings from one of these entities. Consult a lawyer & tax professional if you think you may benefit from having a Limited Partnership.+Since a Limited Liability Company can have multiple people involved much in the same way as a Partnership //(also known as a **multi-member LLC**)//, these are rarely started by the first-time business owner. Those who need something more complex than an LLC are usually inclined to upgrade to a Corporation from here //(see below)//. However, some people hold the arcane knowledge necessary to extract some major overhead savings from one of these specialized entities. Consult a lawyer & tax professional if you think you may benefit from having a Limited Partnership.
  
  
 ==== Corporations & Limited Companies ==== ==== Corporations & Limited Companies ====
  
-The members & shareholders of **Corporations** enjoy a form of limited liability as well. In fact, in other parts of the English-speaking world, Corporations are known as //"Limited Companies"// because of this benefit.+The members & shareholders of **Corporations** enjoy a form of Limited Liability as well. In fact, in other parts of the English-speaking world, Corporations are known as //"Limited Companies"// because of this benefit.
  
 These types of entities **//are not//** to be confused with LLC's. Unlike LLC's, corporations enjoy a form of full personhood, and also have more stringent registration & filing requirements with the state. If your business has to deal with a lot of partners or serious investors, and you need some serious legal [[x:servitor|servitors]] to keep them in line, you may want to consider upgrading to a Corporation. These types of entities **//are not//** to be confused with LLC's. Unlike LLC's, corporations enjoy a form of full personhood, and also have more stringent registration & filing requirements with the state. If your business has to deal with a lot of partners or serious investors, and you need some serious legal [[x:servitor|servitors]] to keep them in line, you may want to consider upgrading to a Corporation.
  
 +To make things even more confusing, some states allow LLC's to use "Ltd. Co." as a suffix on their business name to signify Limited Liability status, even though the abbreviation means //Limited Company// in other English-speaking countries. This is the case for the Institute's holding company, [[https://bestpoint.holdings|Best Point Holdings Ltd. Co.]], which despite this legally-protected misleading name, is in fact a Limited Liability Company and not a Limited Company.
  
-==== Anonymous Limited Liability ==== 
  
-Most states ask for the names of the members of an LLC. Four states however, do not. While they are not called officially as such, LLC's in **New Mexico**, **Nevada**, **Delaware** and **Wyoming** are colloquially known as **//Anonymous LLC's//**, because the business registration is not required to list all the members.+==== Anonymous Limited Liability Companies ====
  
-This concept is not universal. For example, Nevada does actually keep names, the state just stores in a private database somewhere, most likely with terrible security just waiting to be exfiltrated. New Mexico meanwhile collects virtually nothing and has no annual filing requirements.+Most states ask for the names of the members of an LLC, but four states do not. While they are not called officially as such, LLC's in **New Mexico**, **Nevada**, **Delaware** and **Wyoming** are colloquially known as **//Anonymous LLC's//**, because the business registration is not required to list all the members.
  
 +This concept is not universal. For example, Nevada does actually keep names, the state just stores in a private database somewhere, most likely with terrible security just waiting to be exfiltrated. New Mexico meanwhile collects virtually nothing and has no annual filing requirements. By the end of the day, it's a business entity that is hard for the general public to [[tactics:dox|dox]] the owners of. :ninja:
 +
 +
 +==== Unlimited Liability Companies ====
 +
 +Since Canadians are insane, they took the concept in the opposite direction, with one called the **Unlimited Liability Company**. With the **ULC**, there is //no limit// to what can be taken from shareholders to repay company debts. Hope your partners are rational sober people who aren't prone to wacky unpredictable behavior, because you're pretty fucked if they aren't!
 +
 +The only practical use these have in the real world is for **tax-evasion**, as foreign tax authorities will consider Canadian ULC's to be //"pass-through entities"//, letting international megacorps blend their losses together and reduce their tax liability.:pimp:
  
  
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 ===== Acquiring Limited Liability ===== ===== Acquiring Limited Liability =====
  
-//For the purposes of this tutorial, we will be creating anonymous LLC's in **New Mexico**, as it is the cheapest & easiest of all 50 states to do this kind of thing from remotely. However, you may want to consider adapting this guide for **Wyoming**, as they make up for having more expensive filing fees by having no state income tax.//+//For the purposes of this tutorial, we will be creating anonymous LLC's in **New Mexico**, as it is the cheapest & easiest of all states to do this kind of thing from remotely. However, you may want to consider adapting this guide for **Wyoming**, as they make up for having more expensive filing fees by having no state income tax.//
  
  
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 ==== Step 7: Requisition an EIN ==== ==== Step 7: Requisition an EIN ====
 +
 +{{wst>expand}}
 +
 +
 +==== Step 8: Protect Ya Neck! ====
  
 {{wst>expand}} {{wst>expand}}
law/limited-liability.1784622698.txt.gz · Last modified: by Humphrey Boa-Gart

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