ABA Family Legal Guide

Forming and Operating a Small Business

Types of Business Organizations

Limited Liability Companies

Are there any disadvantages?

Surprisingly few. In some states, filing and publication requirements may make it somewhat more expensive to organize an LLC than a corporation. For example, in some states, the official filing costs and the cost of publishing a notice of the formation of the LLC can exceed $2,000.

If you plan someday to finance the company through a private placement or eventual public offering, an LLC would not be appropriate. However, you can always convert the LLC to a corporation at a later date.