TopConsumerReviews.com is a world-leading consumer product review site. We provide detailed reviews and ratings for thousands of products and services.
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.
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.
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.
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.
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.
Top Consumer Reviews Articles
TopConsumerReviews.com provides unique articles that you won't find anywhere else on the internet. These articles are designed to help you make the most informed decisions possible.
Company Incorporation In The News
AUSTIN, Texas--(BUSINESS WIRE)--Statera Spine, Inc. (Statera), a privately held software-enabled healthcare diagnostics company focused on spine imaging analytics, announced today the formation of ...
Published: Mon, 19 Nov 2018 14:57:00 GMT
HAYWARD, Calif.--(BUSINESS WIRE)--Pulse Biosciences, Inc. (Nasdaq: PLSE) ("Pulse Biosciences" or the "Company" ), a novel medical therapy company bringing to market its proprietary CellFX™ Nano-Pulse S...
Published: Mon, 19 Nov 2018 13:14:00 GMT
The law firm of Kirby McInerney LLP is investigating potential claims against PriceSmart, Inc. ("PriceSmart" or the "Company" ) (NASDAQ: PSMT). This investigation concerns whether PriceSmart has violat...
Published: Mon, 19 Nov 2018 18:12:00 GMT
DKG Ed is a company incorporated in Hong Kong with limited liability, and a wholly-owned subsidiary of the Company. DKG Ed intends to develop and enhance its tutoring services to include ...
Published: Mon, 19 Nov 2018 14:19:00 GMT
vice president of product marketing for Apple Inc.'s markets, apps and services. This summer, the company addressed a major IT pain point at many of those organizations, with the launch of Apple ...
Published: Mon, 19 Nov 2018 12:19:00 GMT
- View Full Site -
Reproduction in whole or in part in any form without the express written consent of TopConsumerReviews.com, LLC is strictly prohibited.