What is limited liability company, how do they get their capital?

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A limited liability company (LLC) is a business structure that combines features of a corporation and a partnership. It provides limited liability protection to its owners, known as members, meaning that their personal assets are generally protected from business liabilities. The capital of an LLC can be obtained through various means. Let me explain how this usually works:

1. Personal Contributions: Members can contribute personal funds or assets to the LLC in exchange for ownership rights. This contribution can be in the form of cash, property, equipment, or any other valuable asset.

2. Business Loans: An LLC can borrow money from banks, financial institutions, or private lenders. This debt will need to be repaid by the LLC with interest, typically within a specified timeframe.

3. Additional Members: It is common for an LLC to bring in additional members who can invest capital in return for ownership interest. These new members can contribute funds or assets to the company, thus increasing the capital available to the LLC.

4. Retained Earnings: Once the LLC is operational and generating profits, it can retain a portion of those earnings as additional capital. These retained earnings can be reinvested into the company for various purposes, such as expansion, purchasing assets, or funding future projects.

5. Investment or Venture Capital: Some LLCs may seek outside investment from individuals or venture capital firms. In exchange for capital, these investors usually receive ownership shares or equity in the company.

It's important to note that the specific method of capital acquisition for an LLC may vary depending on its structure, industry, and the preferences of its members. Consulting with legal and financial professionals is advisable to ensure compliance with relevant laws and regulations.