What To Consider While Forming An LLC

Posted by on Apr 2, 2014 in Business | 6 comments

In order to reach your business’ objectives, you need to secure the set-up of your LLC is properly done. Setting up a Limited Liability Company would be a great way to limit your personal liability (just like in a Corporation), but have the advantage of being taxed under the Partnership. This can be tricky, since there is a chance that you may have registered your company as an LLC, but may not avail the Partnership tax status. It is always best to err on the side of caution to ensure that you have set up your LLC properly in order to take advantage of its benefits.

Limited Liability Company laws in a lot of states provide great flexibility for business owners. For one, the law may allow you continual business operation or, should you prefer, operate on a limited duration. The management of business may either fall to all members or just center on certain member managers. Additionally, state laws may also allow you and your business to be comprised of only one owner, as the often required two or more owners. Although this flexibility that state laws allow seem to be an asset to you and your business, it can also cause some issues.

To make sure that your LLC is taxed under the partnership status, you should follow the specified IRS regulations that establish or indicate what a partnership is and how many of these characteristics should be present in order for your business to be considered as a partnership. A corporation can own a partnership, but a single individual cannot. Corporations also give the control or management to their officers or board of directors, while partnerships provide equal managerial rights for all partners. Only following state laws regarding LLC may still cause you to be categorized as a corporation, therefore requiring you to pay your taxes as a corporation. Talking with a lawyer who specializes in business laws and knows the LLC laws in your state would greatly help in making sure you know what it requires to be qualified by the IRS as a Partnership. Having proper legal guidance could guarantee that you have all your bases covered and gain the benefits that an LLC offers.

6 Comments

  1. Do you have a facebook where I can see more posts like this?

  2. Law is always so puzzling to me, thanks for making sense of it.

  3. Do you have an email list

  4. Great read

  5. Criminal defense is serious business and I am grateful that someone is writing about it.

  6. Good post

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