Limited Liability Companies (LLC)
Limited Liability Companies are a preferred
asset protection vehicle of many business owners as well as real estate owners.
The LLC is a non-corporate business entity that is taxed as a partnership
rather than a LLC. As a result of being taxed as a partnership, an LLC
is not subject to corporate income tax. Income is only taxed as personal income
when you receive income or assets from the LLC. The LLC also protects the
personal assets of the members and the officers of the LLC from creditors. The
transfer of shares of an LLC can be greatly restricted by the operating
agreement of that company. Even if a creditor obtained a membership interest in
the LLC, they would only be entitled to their share of profits and would not
become a voting member of the LLC unless the board voted unanimously. This
provides the members greater control over both the present and future
management of the LLC. The benefits of forming an LLC begin immediately upon
formation and registration with the Secretary of State.
Advantages
of an LLC include:
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Asset Protection
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Avoidance of double taxation
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Limited liability of officers’ personal assets
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Reduced paperwork – no requirement to prepare annual company minutes
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Benefits begin immediately
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Continuity of Life