LLCs are similar to corporations in that they offer limited liability protection to its owners. LLCs also have fewer corporate formalities and greater tax flexibility.<\/p>\n
Information on LLCs is provided in the following sub-sections:<\/p>\n
One of the main purposes of an LLC is to provide liability protection for its members and managers. The Limited Liability Company is one of the most powerful business tools available today.<\/p>\n
The LLC structure enables you to operate with its unique features:<\/p>\n
Whether you are just starting a business, or have been in business for years making the decision to form a business entity is very important. To choose the correct business entity you need to ask yourself a number of questions. Nevada Corporate Associates have the answers you need. Contact us today !<\/p>\n
The process is started by understanding\u00a0your\u00a0business operations and how you intend to allocate profits and tax liabilities. Another very important aspect of creating An operating agreement. This document defines the LLC operations. and it outlines the business’ financial and functional decisions; including rules, regulations and provisions. The purpose of the document is to govern the internal operations of the business in a\u00a0manner that supports the specific needs of the business owners.\u00a0When the document is\u00a0executed by the members of the limited liability company, it acts as an official contract binding them to its terms.<\/p>\n
The next operation is the file the LLC with the Secretary of State for the state in which the LLC is domiciled.\u00a0When forming a limited liability company (LLC), you are required to file a document called the Articles of Organization\u00a0with a state or local government agency. The Articles of Organization\u00a0act as a charter and set forth certain basic information about the business.<\/p>\n
As a member of an LLC, either a single member or one of multiple members in the business, you are a business owner, not an employee of your company. You don’t receive a paycheck. Instead, each member has a\u00a0capital account,\u00a0which is the member’s share of the ownership of the LLC (shown as\u00a0owner’s equity\u00a0on the business\u00a0balance sheet).<\/p>\n<\/div>\n
In most cases, when you become a member, either when the LLC is formed or later, you will need to contribute money to this account. When you need money, you draw out (take a distribution from) your capital account.<\/p>\n<\/div>\n
When you take money out of your LLC, you are taking money out of your ownership account for the business. This ownership (or equity) is shown in your\u00a0capital account.<\/a>The capital account is shown on your business\u00a0balance sheet.<\/p>\n<\/div>\n If you need money for personal living expenses, you take a\u00a0\u00a0from your capital account. Sometimes this is called a “distribution” or a\u00a0“draw.”\u00a0The draw is usually in the form of a check, written to you personally on a business check.<\/p>\n<\/div>\n But this check is NOT a paycheck. No federal or state income taxes are\u00a0withheld\u00a0from your draw, nor is there any\u00a0FICA tax\u00a0(Social Security\/Medicare)\u00a0withheld from your draw. Make sure the draw is paid to you by the business, using the business checking account, and that the draw is deposited into your personal checking account.<\/p>\n<\/div>\n You (personally and business) don’t get taxed on the money you draw out for personal use. Your business tax amount is determined by your portion of the\u00a0net income or loss\u00a0from your business for the year.<\/p>\n<\/div>\n An LLC is a strange type of business entity\u00a0because an LLC is not recognized as a taxing entity by the IRS. Instead,\u00a0LLCs pay federal income taxes\u00a0in one of two ways, depending on whether they have one owner (called a member) or multiple owners:<\/p>\n<\/div>\n LLCs can also\u00a0e<\/strong>lect to be\u00a0taxed\u00a0<\/strong>as either a corporation or an S corporation, making the confusion even greater.<\/p>\n<\/div>\n Just to increase the confusion, the IRS and some states call the single-member LLC a\u00a0disregarded entity.<\/p>\n<\/div>\n<\/div>\n For more information on how to “Cover Your Assets”, please feel free to contact <\/a>\u00a0Nevada Corporate Associates for a free private consultation.<\/p>\n","protected":false},"excerpt":{"rendered":" LLCs are similar to corporations in that they offer limited liability protection to its owners. LLCs also have fewer corporate formalities and greater tax flexibility. Information on LLCs is provided in the following sub-sections: Introduction Effectively Implementing Series LLCs Current Implementations Taxation Considerations INTRODUCTION One of the main purposes of an LLC is to provide …<\/p>\n\n