Benefits Of An Limited Liability Company From A Legal Standpoint

In this case Tim’s business is in Sunnydale, Illinois. In the state of Illinois, the following requirements must be met for an LLC. The nature of the business may require you to obtain one or more business licenses. You will be required to file annual reports with the Secretary of State Department of Business services prior to the first day of its anniversary month. Your LLC must be registered in this case with the Illinois Department of Employment Security. Your LLC is also required to inform the IRS and the state whenever it hires a new

When looking at liability, creating an LLC will limit the owner’s exposure to just his invested amount. This will legally shield his home, bank accounts, family’s property and other personal assets from seizure or liquidation in the event the company is held responsible for any of the situations mentioned, such as a cabinet falling or subcontractor failing to perform. It would also protect him in the event the expansion of his company fails, and a worst case scenario of the company going under.

This allows each owner to protect personal assets from claims and lawsuits against the company. This limits the liability of each owner the amount that he or she has invested in the business. The LLC also has the option to choose your own tax situation. In addition, the ruling does not affect the personal finances of the owner as a sole proprietorship.

Income Taxes- Taxes are paid as income tax, unless the limited partnership is classified as a corporation by the IRS for tax purposes. In order to keep from being taxed this way, you would have to stick solely to the contract as written, and keep away from operating outside of the agreement.

A limited liability company consists of a single owner, or sometimes more than one owner, and are not taxed as separate business entities. All profits and losses pass through the business to those who own the company. Owners must report profits and losses on their personal tax return filing as a corporation, partnership, or sole proprietorship. If the LLC is ran by a single owner, they file a 1040 Schedule C form as a sole proprietor. Partners file a 1065 form consisting of a partnership, and a form 1120 is filed if the LLC is filing as a corporation. The LLC must be registered such as the State Corporation Commission, Department of Commerce and Consumer Affairs, Department of Consumer and Regulatory Affairs, or the Division of Corporations and Commercial Code. The great thing about an LLC is that the owner has freedom in management. The owner is able to run the organization as they see fit not answering to anyone,

Limited Liability Company (LLC) combines the tax advantages of a partnership with the limited liability aspects of a corporation. LLC’s are governed by the Uniform Limited Liability Company Act (ULLCA). All members of the LLC enjoy limited liability unless there is serious misconduct is committed by said member(s), or a member fails to follow through on an obligation. All this should be outlined in your preformation contract. You will have more flexibility with taxation and options on how to manage the company. It would be advisable to also have an Operating Agreement. This will dictate how management will be hired and fired, division of profits, how to transfer interest in the event a member chooses to opt out or dies. What steps to take in the event of dissociation of a partner, and if it causes the dissolution of the LLC. Most importantly how the members vote in the LLC. The weight of the members vote is in accordance with the member’s capital

The last of the four types includes the limited liability company, also known as a LLC. An LLC is an unincorporated form of business that carries characteristics of all of the other three forms of business. An LLC can choose to be taxed as a partnership, the owners can manage the business, and the owners have limited liability for debts and obligations of the partnership. LLC’s are

The managing member’s share of the profits is considered earned income and is therefore subjected to the self-employment tax. Also a member of an LLC cannot pay themselves wages from the profits of the LLC. “The great flexibility that is afforded by an LLC makes it one of the most popular types of business formations used” (Waller).

Limited liability: the liability of investors is limited to their personal investments in the corporation.

A Limited Liability Company (LLC), as the name states, has the ability in keeping your liability limited as a professional owner. This is fundamental in protecting your personal assets by separating them from your business assets. In choosing to run a LLC company, we have agreed that a manager-managed business would be conducive to our field of industry. Although one person will have the authority in overseeing the daily tasks of running the business, all non-managing members will still have an input in all decisions in regards to the enterprise. Contract negotiations and employment are just a few of the joint duties of all members. Running an LLC has many advantages like flexibility, limited liability in business related debts, pass-through taxes, and reliability standing. However, with perks there are always some downfalls, such disadvantages consists of being subjected to self-employment tax or if a member departs the LLC ceases to exist, although an Operating Agreement can reverse this challenge. As you can see, running an LLC has more pros, out weighing the cons of such companies.

As a derivative of the C-corporation an S-corporation is subject to all of the same corporate formalities as the C-corporation and actually is not differentiated from the C-corporation under Texas law. This means that in Texas a corporation is founded without the designation of C or S because they are treated exactly the same inside the state. However, the difference between an S-corporation and a C-corporation under federal tax law is significant. The S-corporation is formed by making an election on IRS Form 2553 preventing taxation of profits at the corporate level (IRS, 2012b). The election to not be taxed at the corporate level by a corporation does not in any way effect the limited liability protections that the corporation has under Texas law. This exemption from corporate taxation does not mean that income is not taxed but rather that profits, credits, and deductions are automatically passed to stockholders of the corporation in the current year thereby eliminating any benefit accumulation of profits in the corporation. These pass through items are distributed to the shareholders based on the percent stock ownership of the business (Nitti, 2011).

A limited liability company is a citizen of every state of which their members are citizens.

The first and most notable benefit of an LLC over a Sole Proprietorship are potentially the tax benefits. Even though you are the sole owner of Kyle Grocery Stores, you have many managers and investors that are accumulating a steady amount of wages as a result of the companies increasing revenues and reducing of costs. However, all of the company's revenues are still yours and still go on your tax return. However, as a member of an LLC, each one your managers and you can report on your own individual tax returns provided the LLC agreement be set up the right way.

Liability: The name of this form of business accurately describes one of its greatest advantages: limited liability. LLC’s share the same limits of liability afforded to corporations. Our owners are limited in personal liability since the company and the owners are separate legal entities: just as in a corporation. However, each of our founding members is willing and able to assume personal liability for financial funding. Waiving the veil of financial liability protection is allowed under state LLC rules (Small Business - Chron.com, 2015)

The set up and management consists of members of the company that will manage the business, along with setup of the taxation structure for an LLC that is as a single member LLC-SMLLC. As stated earlier an LLC has attributes of other business formations such as: limited/general partnerships and corporations.