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What Is An LLC?

When you first come up with the idea of a business, it’s the most tempting thing in the world to jump right in and get started. But the realities of taxation and federal and state regulations are best faced during the planning stages of a new venture. For small business owners, the legal structure of the concern can affect taxation on both a federal and state level – as well as a host of other legal and financial matters. Among the choices in structure are sole proprietorship, limited liability corporation (LLC), S-corporation, and partnership. Of these, the LLC is prized by some but often misunderstood.

What is an LLC? An LLC is a legal entity separate from any of the individuals involved in ownership of the venture. Among the primary attractions of this structure is that no owner – or member, as defined in this structure – is individually liable for the debts or obligations of the business. This factor may not seem relevant when sales are booming and the business is flush. But during times of economic distress, if the business falls on hard times, it can save you the inconvenience of sleepless nights.

Commonly, the LLC structure is applied to partnerships and other businesses with a small number of owners. But sole proprietors too can take advantage of its benefits.

Taxation
The federal government taxes LLCs in one of two ways: As a pass-through entity or as a corporation. When an LLC is taxed as a pass-through, the profits go to the owners. The owners in turn pay taxes on those profits when they file their individual tax returns.

Formation
Each state treats the LLC structure differently. Generally, it is simplest to form an LLC in the state in which you do business. However, if you prefer, you can form an LLC in a different state. You must become familiar with the regulations of the state you choose to avoid running afoul of any rules. Some owners choose to form an LLC is a state different from their own – a foreign state – because their native state levies high taxes.

Registered Agent
A registered agent is a person or company on whom notice must be served in case of a lawsuit. It’s no fun thinking about potential legal action even before your business is off the ground, but when you form an LLC, you have to name a registered agent. You can choose an owner or manager of the LLC. But naming an independent party or even another company can lend peace of mind. In fact, any adult who lives in the state where the LLC is formed and who has a street address -- rather than a post office box -- can serve as your registered agent. Of course, you want to select a registered agent who is responsible and trustworthy.

Management
The LLC members may choose to manage the entity for themselves. If your members are scattered about the United States, however, it might be prudent to hire a manager. Of course, no matter what your choice, regular communication with the manager is essential to successful business operation.

An LLC is a business structure that may offer tax advantages. Consult your accountant and/or tax professional and consider carefully when deciding whether to form an LLC.

Charlottesville: Blame the Incorporation Doctrine

There was plenty of blame and finger-pointing in the aftermath of the Charlottesville protests. One woman died and at least 33 people suffered injuries when right-wing and left-wing groups clashed during the Unite the Right Rally. Two state troopers also ...

Published:  Fri, 22 Sep 2017 10:30:00 GMT



Salt Spring looks to heal after rejecting incorporation

Salt Spring Island is a community divided as a result of Saturday's vote against incorporation, but it is resilient and will heal, according to one of the organizers of the campaign against the new form of governance. Patricia Lockie of Positively No ...

Published:  Sun, 10 Sep 2017 16:12:00 GMT



City, Town lock horns over incorporation

BELOIT - Beloit City Manager Lori Curtis Luther is standing by her news release offering annexation options to Town of Beloit residents despite town Administrator Ian Haas calling the release "unfortunate, misleading and incorrect." Luther released a ...

Published:  Wed, 13 Sep 2017 14:00:00 GMT



Edison: approved the project for merger by incorporation of Edison Trading

EDISON: APPROVED THE PROJECT FOR MERGER BY INCORPORATION OF EDISON TRADING. Milan, September 21, 2017 - Edison announces that the minutes of Edison's Board of Directors meeting held on September 20, 2017, which approved, pursuant to art. 2505 - second ...

Published:  Thu, 21 Sep 2017 09:53:00 GMT



West-side town of Beloit residents hear update on east-side incorporation

TOWN OF BELOIT-Residents on the town of Beloit's west side gathered in the Turner High School auditorium Wednesday night to gather details about the east side's efforts to incorporate. The meeting revealed little new information about the ongoing ...

Published:  Thu, 14 Sep 2017 04:34:00 GMT



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