The advantages are:
It allows complete pass-through tax advantages Operational flexibility of a partnership Corporation-style limited liability (under state law) Because of the newness of LLCs, many issues are yet unsettled Some states do not sanction LLCs There are restrictions on transferring membership interests
Management participation by all members The disadvantages are:
LIMITED LIABILITY COMPANY (LLC)
TOPIC
CORPORATION (“C” or “subchapter S”) The business and its stockholders-owners are separate entities. The business is a legal unit unto itself, capable of acting in its own name and right. Business and personal assets are entirely separate. Limited to any unpaid stock subscription liabilities in absence of fraud or other special circumstances. By consent and authorization of state law after compliance with the formalities. Shared indirectly through dividends declared by directors out of profits and apportioned among the outstanding shares of stock. A “regular” corporation pays tax on its income as a separate tax-paying entity. S corporation taxable income (loss) is apportioned among its shareholders.
The business and its stockholders-owners are separate entities. The business is a legal unit unto itself, capable of acting in its own name and right. Business and personal assets are entirely separate. No personal liability, in absence of fraud or other special considerations. By filing Articles of Organization with the applicable Secretary of State, then an ownership agreement. Members determine how profits and losses will be distributed. An LLC is not a separate, tax- paying entity; it provides pass-through tax treatment to owners.
Relationship of Owner to Business
Liability of Owner for Firm Debts
Creation and Organization
Sharing of Profits
Taxation
Perpetual, unless limited by terms of charter, by-laws, or Perpetual, unless limited by terms of Articles.
Period of Life
MOLLY MAID Right Start Transfer Manual Copyright 2015, Molly Maid, Inc.
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