Dorothy Secol, CLA
  Home About Us Services News Resources  
Independent Paralegal Services for Attorneys



The limited liability company – what is its purpose and how does it differ from a regular corporation:

1. An LLC generally protects its owners from personal liability for business obligations in much the same way a corporation does, but an LLC is not a corporate entity.

2. An LLC must be organized in a specific state, however, like a corporation, it can do business in multiple states.

3. The owners of the LLC are called members and there is no limit on the number of members an LLC and have. Also, members do not necessarily have to be individuals, corporations, or other LLCs may be members. The members’ management roles are set forth in an operating agreement.

4. Upon the formation of the LLC, the members contribute cash, property or services to the LLC in exchange for LLC shares or units.

5. An LLC may borrow money in its own name and is responsible for the repayment of the debt.

6. An LLC is usually treated as a partnership for federal income tax purposes.

7. Like partners, LLC members are not considered employees of the company. However, the LLC can have non-member employees.

8. LLC members are taxed directly on company income. The LLC itself doesn’t pay federal income taxes.

9. If an LLC has a loss, its members generally can deduct their share of the loss on their own tax returns.

10. For tax purposes, an LLC’s income and losses are divided among its members according to the terms of their agreement. Tax allocations must correspond to economic allocations of profit and loss.

To help your client in making the choice between a c-corporation, an s-corporation or an LLC, the advice of an accountant always comes in handy. Each entity has its pros and cons and any decision has to be made on the basis of the best tax advantage for your client.

More News >>


Home  |  About Us  |  Services  |  News  | Resources

  Send mail to with questions or comments about this web site.
  Copyright ©2009 by Dorothy Secol, CLA.