Business Structure, LLC
Keeping up with the series in past posts, we’ll continue to examine different types of business structures. Previously we have examined sole-proprietorships, partnerships, S-corporations, and now we will continue on with the ever popular LLC.
LLC stands for limited liability company, and it is one of the newest business structures available. The LLC combines many favorable aspects of both corporations and pass-through entities. Many LLC’s take the ease of structure and operations of smaller business and combines that with the liabilities protections for the owners.
First, some of the primary reasons people for LLCs over corporations is because they are less complex and do not require the same paperwork as corporations. For instance, corporation have required meetings and yearly filings with the government, while LLCs do not need to meet nearly as many requirement thresholds.
Another benefit is that LLCs are not considered separate entity from its owners for tax purposes (but it is for liability purposes). Therefore, this allows owners of LLCs to capitalize on the 199A deduction for pass-through entities. The only additional aspect to the taxes for an LLC is the filing of Form 1065 which will cover the informational return.
LLCs are flexible entities and can be very beneficial for small business owners. They provide the liability protections of corporations, but the tax structure of smaller businesses. If you own a business and think an LLC may be beneficial to you, contact the Center for Financial, Legal & Tax Planning, Inc. for help today.