Open LLC.How it could affect your business.
LLC is an abbreviation for Limited Liability Company.
It is a business structure.
Like general partnership, corporation and sole proprietorship.
Limited Liability Company has its pros and cons.
What is an LLC
What is an LLC? We are going to explain the details and on how it will affect your business.
Single-member LLC is when you have only one person only the LLC.
The one owner owns 100 percent of the company.
A person who has an interest in the company.
They are defined as a shareholder.
A multi-member LLC will give owners maximum protection.
When you have two or more shareholders and is called a multi-member Limited Liability Corporation.
They do not have to have an equal share in the business.
One of the shareholders must become a Managing Director.
He does the day to day operations.
This position can be appointed.
The shareholders can vote on the position and decided who will have that position.
LLC operating agreement is formed by the shareholders.
It is an agreement on how to run the company.
Forming LLC business helps to protect the members against lawsuits is a crucial key.
Reduces paperwork significantly and prevents business from getting taxed twice.
Establish business credibility is significant in why open it.
Sole ownership and a general partnership have no assets or liability protection.
LLC gives protection to your asset and is good if issues arise.
Shareholders will have no personal liability if a lawsuit should arise.
Unlike corporations that get tax twice.
LLC formation and managing is simple and not obligated to double taxation.
LLC structure can opt for S-Corp tax status because maintain is secure than standard C-Corp.
Benefits of LLC
Limited personal liability
LLC owners are not individually accountable for the lawsuits and debts of the business.
Fraud and criminal activities are the only exceptions to this rule.
Formation of LLC is relatively easy with less paperwork.
There is no need to assign directors or hold meetings.
No forms, minutes and resolution reports like C.
Deduction in taxes
Profits of LLC go directly to owners.
They report their dividends directly on their tax returns.
Therefore, LLC profits get taxed just once and none on the LLC
In C-Corp their earnings get taxed by the corporation before owners distribute to its shareholders.
A second time when the dividends are reported on shareholders personal tax returns.
OPEN LLC Flexibility
Restrictions are few in ownership and management structure of an LLC.
Ownership can be in the form of single member and multi-member.
Tax designation can be as S-Corp or C-Corp.
Access to business loans
Forming an LLC allows you get the secure approval of business loans and variety of credit lines.
LLC formation adds credibility to your business and could increase its value.
It is famous as a formal business structure.
Including LLC with your business name allows investors and consumers know you are serious business.
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