An LLC - or limited liability company, blends many of the advantages of a corporation with the easier management of a partnership. For those who choose to file an LLC with the Secretary of State of Alaska, several key benefits are realized. One of the most important protections that an LLC provides is a layer of separation between an owner's personal finances, and that of the business. LLC's are less formal than the typical corporate entity, yet offers a host of protections and advantages.
Business owners form corporations for a variety of reasons, but one of the most compelling factors is the level of asset protection a corporation provides to an owner or officer. A separation between personal assets and business liabilities ensures that business debts don't affect an owner's personal finances. A properly formed corporation allows owners, directors & officers to manage and run their business without the worry of losing their home, car and other personal assets due to business obligations or debts.
Business owners commonly form corporations as a way to protect personal assets from business liabilities. The typical corporation allows owners, directors & officers to concentrate on the core business activities that are vital to growing their business, without the constant worry of business obligations becoming personal liabilities. Corporations help ensure that personal savings accounts, homes, cars, and other assets are safeguarded in the event that business debts become unmanageable.
Corporations that engage in what are generally accepted as professional services (those involving the medical, legal, or financial fields, for example) are required to form a "Professional Corporation." Many state licensing boards require a professional corporation filing.