This type of entity provides the same liability protection as a corporation but can have different tax consequences. It is called a Pass-through taxes as there's no need to file a corporate tax return. Owners report their share of profit and loss on their individual tax returns, meaning you avoid double taxation. Moreover, owners will have limited liability for business debts and obligations. the tax liability can be more substantial than a subchapter S corporation. The main advantages are limited liability entity type will create a legal entity distinct from its owner “members” granting limited liability like a corporation, but will have fewer formalities like a
partnership in terms of taxes and centralized management. In addition, no residency requirement. Owners need not be U.S. citizens or permanent residents to do business in U.S.
One drawback is the self-employment tax, where the income is subject to Federal income tax and self-employment tax on the same return.