Disadvantages of a Limited Liability Company
§ Setting up and maintaining one is more difficult and expensive.
§ Tax accounting can be complicated.
§ Some of the regulations governing LLCs vary by state.
§ Because LLCs are a relatively new type of business entity, there is not as much legal precedent available for owners to anticipate how legal disputes might affect their business.
§ Some states levy a franchise tax on LLCs—which is essentially a fee the LLC pays the state for the benefit of limited liability.