Easy Questions  
Free Legal Documents

Advantages and Disadvantages of a Limited Liability Company (LLC) in Adel, GA

Advantages and Disadvantages of a Limited Liability Company (LLC) in Adel, GA


Grit is often the single-most predictor of success.
 
- Jonah Lehrer


Overview:


A Limited Liability Company (LLC) is a legal business entity that combines the liability protection of a corporation, the operating flexibility of a partnership, and the tax benefits of a sole proprietorship. Though the rules for forming an LLC vary by state, it is a popular option for many start-up businesses.

Advantages:

Limited Personal Liability and Exposure

One advantage of an LLC is the limited liability shield, which protects the personal assets of its members. Creditors, typically, cannot hold members personally responsible for the debts and liabilities of the business. Members can only be liable to the extent of their business investment.

Pass-through Taxation

Though there are an array of tax options for a Limited Liability Company; an LLC is generally treated as a "pass-through" entity. Profits and losses pass through the business to the members and are taxed at the personal level. The business itself is not taxed. Reporting is done on members' individual income tax returns. No double taxation with both the company and the owner(s) paying taxes on the earnings of the business.

Operational Flexibility & Simplicity

An LLC is much less formal than a corporation. Record keeping and administrative procedures are not as onerous. There are no quarterly and annual meetings, or tax filings. Neither is there a board of directors.

Legitimacy

Registering a company as an LLC adds credibility to a business, and can help in brand building and marketing to potential clients and suppliers. In addition, the company can enter into contracts on its own, and also acquire property.

Disadvantages:

Higher Fees

An LLC typically pays higher filing fees compared to some other business entities or sole proprietorships. Additionally, some states require annual renewal fees or franchise taxes. It is difficult for an LLC to attract additional investment because the company does not have the ability to issue stocks and bonds. Members have to finance its business activities, or take in private investors. Getting a loan can be tough, especially for small and start-up companies. The company may have to use its business, or personal, assets to guarantee business loans.

Fewer fringe benefits

Employees of an LLC who receive fringe benefits, for example, medical insurance and parking, must treat these benefits as taxable income. This is also true for employees who own more than 2% of an S-corporation. However, employees of a C-corporation do not have to report fringe benefits as taxable income.
 
Edit, Download, & Print a Free
Georgia Last Will
Page 1
Page 2
Page 3
Page 4
Page 5
Page 6
Page 7
Page 8
Page 9
Page 10
 
Edit, Download, & Print a Free
Georgia Living Will
Page 1
Page 2
Page 3
Page 4
Page 5
Page 6
Page 7
Page 8
 
Edit, Download, & Print a Free
Georgia Power of Attorney
Page 1
Page 2
Page 3
Page 4
Page 5
Related Legal Services near Adel, GA
Barnick Terry R
300 E 4th St
Adel, GA 31620
(229) 896-7424
Attorneys Referral & Information Service, Attorneys
Bennett Matthew B
201 E 5th St
Adel, GA 31620
(229) 896-5295
Accident & Property Damage Attorneys, Attorneys, Criminal Law Attorneys, Family Law Attorneys, Real
Connell III Daniel J
201 E 5th St
Adel, GA 31620
(229) 896-5295
Accident & Property Damage Attorneys,  Attorneys,  Criminal Law Attorneys,  Family Law Attorneys,  R
Carter & Carter, LLC
309 N Parrish Ave
Adel, GA 31620
(229) 896-4513
Attorneys,  Social Security & Disability Law Attorneys,  Corporation & Partnership Law Attorneys,  L
Bagley Law Firm PC The
134 S Hutchinson Ave
Adel, GA 31620
(229) 896-1710
Attorneys, Family Law Attorneys
12Law.com   |  NASHVILLE, TN USA   |  CONTACT US