Quotes About LLC

portions thereof in any form whatsoever.   First Start Publishing eBook edition October 2012   Start Publishing is a registered trademark of Start Publishing LLC

Corporate tax reform should include not just large C-corps but also smaller business S-corps and LLC pass-throughs. And nearly as important as cutting business tax rates is the need to simplify the inexplicably opaque and complex system.

If the LLC was formed under California law, the attacker would have the ability to pierce through the LLC and force a sale of the buildings.

Brendan makes $200,000 a year in his pool cleaning business. As a single-member LLC, he would pay over $18,000 in payroll taxes on the entire $200,000 profit. If Brendan used an S corporation and paid himself a $72,000 a year salary and flowed the rest through as profits without payroll taxes, his payroll taxes would be $11,000 per year. As such, Brendan could save $7,000 a year, year in and year out, by using an S corporation over an LLC. Who says choice of entity isn't important?

In an S corporation you can pay yourself a reasonable salary, on which you pay payroll taxes. Profits after salary can be flowed through to the owner without payroll taxes. (Please note that an LLC can elect to be taxed as an S corporation and achieve this benefit.)

In an LLC, the members get the benefits of business debt

Their LLC has good credit and is able to borrow $600,000 without the need for personal guarantees. The loan has the effect of increasing each owner's tax basis by $200,000. Because distributions are taxed only when they exceed an owner's basis, this means that Lisa, Lyn and Lovella can each receive $200,000 in profit distributions tax free from the LLC.

When holding an asset, as a general rule you will be better protected using an LLC instead of a corporation.

To obtain such protection it is important to sign any agreement as an officer of the LLC. By signing an agreement "Joe Doe" without adding "Manager, XYZ, LLC" you can become personally liable. The world must be put on notice that you are operating as an independent entity.

you don't want a lot of assets in one LLC (or LP). An LLC that holds ten properties is a much bigger target than ten LLCs each holding one property. In the first case, a fall at one property exposes the other nine properties to attack.

By contrast, in a member-managed LLC, the members are the shareholders, directors, and officers all at once.

By using separate LLCs we have the certainty that assets in a remote LLC will not be exposed to claims brought against a target LLC. The series LLC does not offer such certainty.

That argument worked until the state of California decided that each series would be taxed as a separate LLC. So instead of paying just $800 for one series LLC in California you would pay, in our four-asset example, $3,200 for the series—the same as if you'd used four separate LLCs with greater certainty of protection.

The series LLC is supposedly designed so that by setting up (and paying the fees on) one asset-protected LLC you can protect a number of properties in separate series within the one LLC.

By including special language in your LLC's operating agreement you may be able to create a safe harbor to insure that future special allocations will have a substantial economic effect.

one of the most significant benefits of the LLC, and a key reason for its existence, is the fact that the IRS recognizes it as a pass-through tax entity. All of the profits and losses of the business flow through the LLC without tax. They flow through to the business owner's tax return and are dealt with at the individual level.

On the other hand, transferring the house out of an LLC is not a taxable event.

The beauty of having an LLC in today's world is No. 1, you have the ability to act and react as nimbly as need be to create change, and you have the ability to invest politically, in the for-profit sector and the nonprofit sector simultaneously.

Most small businesses in this country today are taxed at the individual level as Corporation LLC. So whatever is cut out of those earnings is money taken out of capital for reinvestment for creating more jobs and opening up more locations.

LLC profits and losses flow through the entity and may be freely allocated without regard to ownership percentages.

unlike a corporation, real estate, intellectual property as well as stocks and bonds in a brokerage account can be transferred in and out of an LLC at their basis, thus incurring no taxation.

California residents must be cautious when considering the use of an LLC. The fees are onerous.

In addition to the annual LLC franchise fee of $800, the state of California hits LLCs with a fee based on their gross receipts. This fee has nothing to do with whether your company is profitable or not. It is only based on revenue generated, so you can lose money and still owe the fee.