LLCs are similar to corporations in that an LLC can protect personal assets from business debt. A major difference between the two is that corporations pay taxes at the corporate level and again at the individual level when shareholders receive dividends. LLCs only pay taxes at the individual level, which is one of the key advantages of an LLC over a corporation.
What filings (papers) are required to form an LLC?
The Articles of Organization must be prepared and filed, together with the necessary state filing fees and various initial fees to create an LLC.
Is an attorney needed to form an LLC?
It is not necessary to hire a lawyer to form an LLC. CCA can form an LLC for you, saving you time and money involved in hiring a lawyer. However, hiring a lawyer can help you if you need direction about what type of business form you should choose.
How many persons are needed to form an LLC?
You only need one person to form an LLC.
How can ownership of an LLC be evidenced?
Once a business is formed as an LLC, the operating agreement indicates the particular holder’s ownership percentage within the company.
What is the ownership structure of an LLC?
The owners of an LLC are called “members.” Members can choose to handle the day-to-day operations themselves, appoint someone within the business, or hire an outside manager.
What are the differences between an S corporation and an LLC?
An S corporation is not a business entity but a tax classification that can be selected by LLC and corporations. An S corporation has restrictions that are not the same as those of a traditionally classified LLC. For instance, the number of shareholders is limited to 100, while LLCs can have unlimited members. In addition, the owners of an S corporation are typically required to be US citizens or permanent residents. Also, any owners who work for the business must be paid a reasonable salary. However, unlike LLCs, shareholders won’t have to pay self-employment taxes on distributions made by the business.