LLC Information
The amount of businesses that have recently chosen to incorporate as an LLC has risen greatly. Below you can find our FAQ section with should address any questions or information you may require, as well as just why an LLC may be for you.
There are particular situations that Limited Liability Companies (LLC) exceed in, some examples would be:
- Simplifying business tax returns
- Replacing limited partnership agreements
- To house real estate investment properties
- For companies with partial or total foreign ownership
We assist all our clients in the formation of LLC's within all U.S. states
What is an LLC?
Simply, an LLC is a relatively new but very popular company status that increases your companies liability protection and tax advantages. Owners benefit from a limited liability for the obligations or debts of the entitiy much like a corporations shareholders, while the owners have losses and income passed through to them similar to a partnership.
How Exactly Are My Tax Advantages Increased With an LLC?
"C Corp." owners are taxed on corporate profits as well as personal income where profits are shared as dividends. "S Corporations" improve the situation to a certain degree by subjecting corporate profit to just the one taxation, by allowing profits to pass through personal income. The negative side of an "S Corp." though is that they come with their restrictions and lack the flexibility of an LLC.
- The beauty of an LLC is that profits are taxed as if in a partnership, on a personal level and just the once.
One of the main features of incorporation is the corporate type of shell that surrounds any corporation owned assets, therefore seperating them from any assets of a personal nature. A corporate status means your personal assets are pretty much protected, while in a partnership that protection is not there. Normally so that tax advantages of the partnership can be secured.
- Whats great about an LLC is that not only does it give you full corporate protection, it does all of this while providing the tax advantage of a partnership.
Does an LLC Provide Shareholder Flexibility?
"C Corporations" enable any number of people or entities to be shareholders. While in an "S Corporation" the shareholders can not be foreign or corporate, nor can the number of shareholders exceed 70.
And with a partnership there needs to be at minimum one "general" partner, who has any number of limited partners and full liability. Partners have liability limited to their investment, but may also not be involved with the company or the management. But note that this level of protection is not allowed in every state.
- An LLC allows any number of members, no matter if they are corporate or foreign. Limited Liability Companies benefit from the flexibility of a "C Corp" that an "S Corp" and partnership lack.
Is a LLC Widely Accepted?
It has been called a "safer strategy for small businesses", and more or less every state has taken on and accepted the LLC, with thousands and thousands having been formed already.
Why a Delaware LLC?
Delaware is a popular and corporation friendly state which adopted the LLC early and has the proven experience and track record in adjudicating matters of a legal nature involving LLC's. To put it simply a Delaware LLC gives you the best of both worlds; all the advantages of incorporating in Delaware and the corporate status of a limited liability company.
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