An LLC, or limited liability company, can be considered to be a marriage between a corporation and a partnership. Basically, with an LLC you get many of the same benefits that a corporation enjoys, without the majority of the formalities that come with a corporation.
An LLC doesn't pay income taxes, but rather the taxes pass through the LLC onto the owners, who are called members. So, unlike a corporation, an LLC does not pay income taxes.
Income from an LLC is taxed only once because it passes straight through the business, onto the owners. Therefore, an LLC does not suffer from the double-taxation issue that a corporation deals with. But, an LLC still pays any payroll taxes required by the federal and state governments.
You choose the tax treatment you desire when you set up your LLC. You can be taxed as a C corporation, an S corporation, or treated like a sole proprietor. With an LLC, the decision is yours to make.
The members of a limited liability company are afforded certain personal liability protection with an LLC, assuming it is set up right and all business and personal activities are properly separated. This is one of the biggest reasons why people choose the LLC structure over being a sole proprietor.
The person that forms the LLC does not have to actually be a member of the LLC. You can have an online LLC formation company do the work for you, thus ensuring that everything is set up properly.
The money a member puts into an LLC determines that member's limit of liability. Also, with an LLC you are allowed to have several partners, either active in the company or serving as silent investors.
An LLC gives its owners greater flexibility than a corporate structure would, but at the same time it is very similar to a corporate structure. A small business with a limited number of owners would be a perfect candidate for the LLC structure.
In the United States, the limited liability company is still a relatively new form of business structure. Just 20 years ago, only two states allowed the formation of LLCs. Today, every state recognized the LLC as a valid business entity. - 15790
An LLC doesn't pay income taxes, but rather the taxes pass through the LLC onto the owners, who are called members. So, unlike a corporation, an LLC does not pay income taxes.
Income from an LLC is taxed only once because it passes straight through the business, onto the owners. Therefore, an LLC does not suffer from the double-taxation issue that a corporation deals with. But, an LLC still pays any payroll taxes required by the federal and state governments.
You choose the tax treatment you desire when you set up your LLC. You can be taxed as a C corporation, an S corporation, or treated like a sole proprietor. With an LLC, the decision is yours to make.
The members of a limited liability company are afforded certain personal liability protection with an LLC, assuming it is set up right and all business and personal activities are properly separated. This is one of the biggest reasons why people choose the LLC structure over being a sole proprietor.
The person that forms the LLC does not have to actually be a member of the LLC. You can have an online LLC formation company do the work for you, thus ensuring that everything is set up properly.
The money a member puts into an LLC determines that member's limit of liability. Also, with an LLC you are allowed to have several partners, either active in the company or serving as silent investors.
An LLC gives its owners greater flexibility than a corporate structure would, but at the same time it is very similar to a corporate structure. A small business with a limited number of owners would be a perfect candidate for the LLC structure.
In the United States, the limited liability company is still a relatively new form of business structure. Just 20 years ago, only two states allowed the formation of LLCs. Today, every state recognized the LLC as a valid business entity. - 15790
About the Author:
Author Caressa Waechter owns a business and is a strong believer in Incorporate LLC if you have your own business. Learn more about starting an LLC online by visiting her website: Forming LLC