A common question about Ltd.


Limited Liability Company with a & # 39 is a popular sub & # 39; an object of management for small businesses. Here are some common questions and answers about the nature.

LLC stands for Limited Liability Company. For the first time this organization was created in Wyoming in the late 1970s, but now it is available in all states. Ltd. is touted as a great sub & # 39; facility management for small businesses, because it ensures the protection of a corporation without the formalities. It also offers the opportunity to be taxes as a partnership, although in some situations, there are some limitations in this version.

Before getting into common questions and answers regarding the LLC, it is important to note that the rules governing the structure – is first of all the state laws. Although taxation in most cases the same for our friends from the IRS, there is no national legislation on how to create an LLC, govern, and so on. Instead, the state is established by law. As you can imagine, California law differs from Delaware law which differs from the law of the State of New York and so on. If we talk, the following are some common questions that arise.

Can a company owned by the same person? In the vast majority of states a person may be eligible LLC directly. However, this simple answer leads us to a secondary problem. Ltd., owned by one person, known as a "member" can not be taxed as a partnership. Why? For partnership requires two persons. If there is only one owner, the IRS requires him or her filing taxes as if the Company & # 39 with an individual owners. This means that you must pay the 15.3 percent self-employment tax.

What is the difference LLC and S-corporation? For many small businesses is the ultimate challenge in determining the sub & # 39 facility management. In general, S-corporations have a limit on the number of shareholders limited no more than 75 shareholders. As an S-Corporation is required to comply with corporate formalities, mean holding meetings and so on. On the positive side, S-corporation usually offers a better tax situation than the Company. Why? The members of the LLC must pay social security taxes and Medicare for all distributions. The shareholders of S-corp must only do so for their reasonable salaries. Any profit need not include the payment of such tax.

Ltd. should hold an annual meeting? The answer depends on the laws in your state and the agreement on the exploitation LLC. In general, there is no such requirement. If this is the case in your state, you will still need to meet at least once a year. Why? If the company sued, you want to show that it was like a business, and the annual meeting – a good way to do it. Corporate book that has not been touched since the creation LLC, never looks good.

As you can imagine, there are many other issues that arise when it comes to the company. That being said, it is more common to be solved, and often – no.