LLC's: What's all the hype about?
The Limited
Liability Company (LLC) status has sparked the interest of many
business ownerd since it's inception. This relatively new form of
entity is intriguing
because it offers the limited liability benefits of a corporation while
still offering the
flexible
management and pass-through taxation benefits enjoyed by sole
proprietors
and partnerships.
LLC owners are
referred to as members. A member can be an individual,
corporation, other LLC, or foreign entity. Unlike an
S-Corporation, there is no limit
on the
number of members an LLC can have and most states allow single
membership,
such as a sole proprietor. If the LLC
is a sole proprietorship, the entity is ignored
for income tax
purposes and the net income is reported on the individual member's
Form
1040, Schedule C, E, or F. Multiple member LLC's file either Form
1120,
or
1120-S if considered a corporation, or Form 1065 if considered a
partnership.
Unfortunately
there are a few industries that are not able to take advantage
of LLC
entity classification. Banks, insurance companies, and nonprofit
organizations
are
among those unable to be classified as Limited Liability Companies.
To discuss various tax implications and
whether it would be advantageous for
your
business to be classified as an LLC, you may contact our office at
(330) 852-2479.
Our
office would be happy to assist you in making the decision that is best
for your
business.
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