When should I choose an LLC for my business model?
Author: Ivan Welten
Website: http://www.IncorporationWeb.com
Added: Wed, Dec 31, 1969 17:00:00
Category: Incorporation Questions
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The major advantage of an LLC is restriction on its members' liability. You need not worry about double taxation since an LLC's earnings are not subject to such taxes and you will have a better flexibility in organizing and managing the business.
An LLC structure is most commonly used by small businesses. In some ways, an LLC combines the best features of a partnership or sole proprietorship and a corporation. The combination of those features makes LLC's the ideal type of business structure for anyone concerned with excessive business losses or lawsuits.
One such example of this would be a new startup business. A big advantage for startups is that the LLC is not taxed as an entity. The members are taxed, usually in ratio to their ownership percentages. Since new startups generally lose money their first year or two in business, your prorated portion of that loss can be applied to your personal tax return, often giving you a personal tax refund.
keywords: Incorporation | Incorporate | Incorporating | Business | LLC | Limited Liability About the Author:
Ivan Welten answers frequently asked incorporation questions at PrettyGreatAnswers.com.
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