Advantages of a LLC
There are many advantages and benefits for business owners stand to register their company as a limited liability company (LLC). While other forms of business onwership such as general partnerships and sole proprietorships don't have the same taxation choices that LLCs do. Here are some of the advantages of a LLC::
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Limited liability protection. Limited liability protects the personal property of LLC members. The LLC is solely responsible for any business debts and liabilities incurred.
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Pass-through taxation. A LLC is a legal entity where income "flows through" to members. The LLC does not pay income tax but the members pay income tax at the personal level on their personal income tax returns.
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Flexibility in allocating profits among owners. Profits and losses can be allocated to various LLC members.
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No ownership restrictions. Unlike an S corporation that only permits a maximum of 100 owners, LLCs do not have any limits on the number of members that can have ownership in the LLC.
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Flexible management. With a LLC, there are an unlimited number of ways of structuring a company's management. Typically, an operating agreement is used to outline the management. However, without an operating agreement, each state has a default set of laws that LLCs must follow.
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Different membership classes. LCompared to S corporations restrictions on stock classifications, LLCs are permitted to have more than one ownership class.
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Fewer ongoing formalities. LLCs have much less administrative paperwork than do S corporations or general corporations. In many states, there are no annual meeting requirements for LLCs.
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Credibility. LLCs are viewed as more legitimate in the eyes of the public than a sole proprietorship or general partnership.
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Consent to add owners. LLC members must agree in writing to increasing the ownership in the company or adding new members.
Forming a LLC?
To form a LLC, a document called "Articles of Organization" must be filed with the state and the appropriate filing fees paid. DBI Global Filings, LLC can handle all of the details for you.
Select a state to get started:
