Grob1o61's Blog

October 6, 2009

Limited Liability Corporations

Filed under: Uncategorized — grob1o61 @ 1:08 am

BlogPurpleHello Blogoholics, it’s that time again. Papa DonderVogel here to discuss business.

     Thinking of starting your own business? Have you heard of Limited Liability Corporations? You have? Well, like Purple People Eaters, they don’t exist. But, there are LLC’s or Limited Liability Companies. The reason for the confusion is the description of LLCs as the best qualities of a corporation without the cost and complexity.  A LLC, defined in each state by state law, is a legal form of business company that provides limited liability to its owners. It is a hybrid business entity having certain characteristics of both a corporation and a partnership or sole proprietership (depending on how many owners there are). An LLC, although a business entity, is a type of unincorporated association and is not a corporation. The major advantage here is limiting the liability of the owner(s). How limited depends on the laws of each state and what kind of liabilities you want to be protected from. Fraud or other kinds of illegal activity? Not protected. For other details check with your state.

     The Federal government does not recognize a LLC as a classification for federal tax purposes. This allows check-the-box taxation. A LLC can elect to be taxed by the federal government as a sole proprietor, partnership, S corporation or C corporation (as long as they would otherwise qualify for such tax treatment), providing much flexibility. For further, and best, information take a click over to your Secretary of State’s homepage. That is where you’ll be most likely to find information for your area.

Until next week,

This is Papa DonderVogel signing off.


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