What is an LLC? Business Articles | November 26 Wholesale Josh Allen Jersey , 2008 LLC (Limited liability Company) is a legal form of business company offering liability to its owners. LLC is suitable for smaller companies with a limited number of owners. An LLC can cho...
LLC (Limited liability Company) is a legal form of business company offering liability to its owners. LLC is suitable for smaller companies with a limited number of owners. An LLC can choose to be either member managed or manager managed.
LLC is very flexible since the owners have limited liability for the actions and debts of the company. A member managed LLC may be governed by a single class of members or multiple classes of members whereas a manager managed LLC creates a two-tiered management structure that approximates corporate governance with the managers having powers similar to corporate officers and directors.
Introduced in Wyoming in 1977, LLC is a relatively new form of business organization.
After the IRS agreed in 1988 to give LLCs partnership tax classifications, legislatures in all 50 states only adopted LLC laws. In 1993, Missouri first adopted the LLC as a legal form of business organization.
If taxed as a partnership, LLC use IRS Form and Schedule SE (Self-Employment Tax). Specified publicly by the state Wholesale Dawson Knox Jersey , LLCs are organized with a document called the ?articles of organization?. Although the specific information in the Articles of Organization varies from state to state, all LLCs are required to provide their company name, assign a statutory agent and provide their purpose of running the business. Also, with regards to filing the Articles of Organization, the fees vary from state to state.
The Operating Agreement of an LLC is considered to be of utmost importance because it determines Wholesale Devin Singletary Jersey , defines and apportions members? rights. Moreover, it is common to have an operating agreement privately specified by the members. The operating agreement is a contract among LLC members and LLC governing the membership, management, operation and distribution of the company?s income. Members who operate without an operating agreement most likely get into problems.
The main corporate characteristic is limited liability whereas the main partnership characteristic is the availability of pass-through income taxation.
All LLCs are required to have one member. LLC members are owners of the LLC and a member?s liability to repay the LLC?s obligations is limited to his or her capital contribution.
Profits are taxed personally at the member level using default tax classification.
In some states, LLCs can be set up with just one natural person.
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