What are some advantages of an LLC?
Well, first, please read the above paragraphs. Other than taxation treatment, there are significant advantages of the LLC vs. a Corporation insofar as management, ongoing preservation of the company’s limited liability qualities and with the flexibility of ownership rights. First of all, preservation of the limited liability features of the company should be considered. When you incorporate, you must follow many rules after incorporating the company to ensure you have preserved liability protection to the directors and shareholders. These formalities include holding and recording by way of corporate minutes scheduled meetings of directors and shareholders. Proper procedure for issuing stockholder shares and adherence to strict regulations governing corporate operations must be followed. If not, then the principals to the entity may be held personally liable for debts or other obligations. This is commonly referred to as piercing the corporate veil. There are no rules in Arizona for an
– Tax Advantages The LLC is not taxed twice, even though it is a combination between a partnership and a corporation. In most cases, a Limited Liability Company is taxed as a partnership, which means that its profit margin can be somewhat higher than it might be otherwise. Which leads us into the next subject – Profits In a Limited Liability Company, profits flow through the business to the individual owners. Losses, gains, what have you — they all directly affect the members. This can be both advantageous and not. However, with the distribution of profits being flexible (rather than 50-50 or what have you), it is more often than not the former: an advantage. – Legal Advantages Beyond profit advantages, there are legal advantages to owning a Limited Liability Company. For instance, you don’t have to sign a personal guarantee of your services if you run an LLC. You are only liable for your company’s debts if you do so. LLCs are also not required to keep minutes at meetings or make reso
