I am a singer who tends to hit random pitches. I Love my wife Rachel and my five children. Sierra (11), Aleya (8) Jayden (7) Jackson (7) Kaiden 3. Four of our five children are adopted so I am very interested in adoptions and the stories that go with them. I am a dairy farmer which I enjoy most of the time. Most importantly I love the Lord.
Saturday, March 15, 2008
LLC
Can someone tell me exactly what an LLC is? Is it a partnership or is it not? I always thought it was some kind of corporation, is this correct or not?
It is a corporation that can be set up to be taxed in differant ways If I under stand right you can start one of these corp. with less paper work(lower cost) than other types of corp.s Once you set up how you will be taxed you can't change. Does that help Paul H Good
I would try to explain a Limited Liability Company to you, but I believe an e-mail I received from my Business Law professor answering a question of mine about LLCs explains it better than I can:
“An LLC is one of several business entities that is separate and distinct from its owners for liability purposes. To the extent that someone working for the business commits a violation or the business produces a product that injures someone, for example, the owner is not personally liable for the harm caused. Now, to the extent that the owner was the person causing harm to the third party -- let's say the owner was driving a vehicle belonging to the LLC and is at fault in an accident -- then the owner is individually liable for the consequences of his own actions. The LLC is also liable for the actions of anyone acting on its behalf. In other words, for many claims both the perpetrator and the company for which the person is employed are liable.
For financing purposes, for example, many banks who lend money to the LLC (or corporation, etc.) will not do so unless the owner also provides a personal guarantee. So even though the owner would not be directly responsible if the LLC couldn't pay its debts, he is still liable for an unpaid debt by virtue of his guarantee as an individual. That's why they demand the personal guarantee -- the bank would otherwise have no recourse beyond the business assets if the debt was not paid. For liability purposes, regardless of the type of entity selected, it is generally prudent to purchase some form of liability insurance to insure against harm caused to third parties. Indeed, liability insurance can actually take the effective place of forming a separate entity to protect against personal exposure.”
As previously stated, an LLC is flexible as far as what type of business you prefer to be set up as…partnership, S Corp, C Corp, etc. The limited liability of an LLC is the attractive feature to most folks. http://en.wikipedia.org/wiki/Limited_liability_company is a good resource to read more in-depth information.
Well, this turned out to be a bit of a book...hope it's not too much information.
3 comments:
Limited Liability Corp., I believe. Don't really know what that means though.
It is a corporation that can be set up to be taxed in differant ways
If I under stand right you can start one of these corp. with less paper work(lower cost) than other types of corp.s
Once you set up how you will be taxed you can't change. Does that help
Paul H Good
I would try to explain a Limited Liability Company to you, but I believe an e-mail I received from my Business Law professor answering a question of mine about LLCs explains it better than I can:
“An LLC is one of several business entities that is separate and distinct from its owners for liability purposes. To the extent that someone working for the business commits a violation or the business produces a product that injures someone, for example, the owner is not personally liable for the harm caused. Now, to the extent that the owner was the person causing harm to the third party -- let's say the owner was driving a vehicle belonging to the LLC and is at fault in an accident -- then the owner is individually liable for the consequences of his own actions. The LLC is also liable for the actions of anyone acting on its behalf. In other words, for many claims both the perpetrator and the company for which the person is employed are liable.
For financing purposes, for example, many banks who lend money to the LLC (or corporation, etc.) will not do so unless the owner also provides a personal guarantee. So even though the owner would not be directly responsible if the LLC couldn't pay its debts, he is still liable for an unpaid debt by virtue of his guarantee as an individual. That's why they demand the personal guarantee -- the bank would otherwise have no recourse beyond the business assets if the debt was not paid. For liability purposes, regardless of the type of entity selected, it is generally prudent to purchase some form of liability insurance to insure against harm caused to third parties. Indeed, liability insurance can actually take the effective place of forming a separate entity to protect against personal exposure.”
As previously stated, an LLC is flexible as far as what type of business you prefer to be set up as…partnership, S Corp, C Corp, etc. The limited liability of an LLC is the attractive feature to most folks. http://en.wikipedia.org/wiki/Limited_liability_company is a good resource to read more in-depth information.
Well, this turned out to be a bit of a book...hope it's not too much information.
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