A limited liability company, or LLC, can be best described as being a hybrid between a corporation and a partnership. Simply explained, an LLC offers many of the benefits of a corporation without all of the corporate formalities.
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.
The way that income taxes are paid by you, as a member of an LLC, is decided when you initially set up the LLC. You choose between taxed as a C corporation, an S corporation, or as a sole proprietor. The beauty of an LLC is that you get to decide how you are going to be taxed.
Certain personal liability protection is afforded the members of a properly set up LLC, but business and personal activity must be keep completely separate for this to happen. This liability protection is one of the reasons people choose an LLC over sole proprietorship. Also, as an LLC a company usually earns more respect in the customer's eyes.
A limited liability company is formed by someone who does not necessarily need to be a member. There are actually several very good online companies that will form your LLC for a very nominal charge, saving you from having to ensure everything is set up correctly.
A members liability is limited to the financial contribution made by that member. And an LLCs structure allows you to bring in multiple partners, who can either be actively involved in the business, or serve as silent investors.
A limited liability company is a business organization, or business structure, that is very similar to a corporation, but offers more flexibility to its owners. It is a structure that is suitable for smaller companies in which the number of owners is limited.
The limited liability company is a fairly newly created business structure in the United States. Just a little over twenty years ago the LLC was recognized by only two states. Now days, every state allows you to form an LLC. - 15465
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.
The way that income taxes are paid by you, as a member of an LLC, is decided when you initially set up the LLC. You choose between taxed as a C corporation, an S corporation, or as a sole proprietor. The beauty of an LLC is that you get to decide how you are going to be taxed.
Certain personal liability protection is afforded the members of a properly set up LLC, but business and personal activity must be keep completely separate for this to happen. This liability protection is one of the reasons people choose an LLC over sole proprietorship. Also, as an LLC a company usually earns more respect in the customer's eyes.
A limited liability company is formed by someone who does not necessarily need to be a member. There are actually several very good online companies that will form your LLC for a very nominal charge, saving you from having to ensure everything is set up correctly.
A members liability is limited to the financial contribution made by that member. And an LLCs structure allows you to bring in multiple partners, who can either be actively involved in the business, or serve as silent investors.
A limited liability company is a business organization, or business structure, that is very similar to a corporation, but offers more flexibility to its owners. It is a structure that is suitable for smaller companies in which the number of owners is limited.
The limited liability company is a fairly newly created business structure in the United States. Just a little over twenty years ago the LLC was recognized by only two states. Now days, every state allows you to form an LLC. - 15465
About the Author:
Caressa Waechter is a business owner who thinks all small businesses should look into creating a LLC. Visit her website to learn more about online LLC formation: Incorporate LLC
