Why Open an LLC?
Limited-Liability Companies (LLC) is a state-mandated business entity that combines features of corporations and partnerships. LLCs are a newer form of business ownership and are useful for many types of businesses and industries.
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Tax Advantages
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LLCs may be taxed as a corporation, partnership or sole proprietorship. This allows owners and managers to select the best tax method for their business operations.
Pass-Through Taxation
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If the default tax setup is used with an LLC, income from business operations is taxed at the owner's personal tax bracket. Pass-through taxation allows owners to pay fewer taxes through their personal rate, saving the company a large tax expense.
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Fewer Company Requirements
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LLCs in most states do not require heavy documentation of corporate management decisions like the state corporation requirements. Annual meetings, shareholder quorums and other corporate requirements can be avoided through an LLC.
Easy Management Structure
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Board of directors positions are not required for LLCs in most states, creating less corporate management in decision-making. This also lowers costs for the LLC by retaining personnel that directly affect operations, rather than a generalized direction of the company.
Continuing Operations
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LLCs are considered ongoing operations, allowing companies to continue operations after the death of an owner or principal partner. LLCs may continue operations until a form is filed with the LLC's home state dissolving the LLC operations.
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