Easy Questions  
Free Legal Documents

Advantages and Disadvantages of a Limited Liability Company (LLC) in Charlestown, NH

Advantages and Disadvantages of a Limited Liability Company (LLC) in Charlestown, NH


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.
 
Personalize & Print a Free NH Last Will Download this Document
Page 1
Page 2
Page 3
Page 4
Page 5
Page 6
Page 7
Page 8
Page 9
Page 10
 
Personalize & Print a Free NH Living Will Download this Document
Page 1
Page 2
Page 3
Page 4
Page 5
Page 6
Page 7
Page 8
Related Legal Services near Charlestown, NH
Mondesir Helen and Michael
260 Spruce St
Manchester, NH 03103
(603) 935-7724
Attorneys
Tshuma Promise
20 Bog Rd Apt 301
Concord, NH 03303
(603) 224-6722
Attorneys, Legal Service Plans
Geiger Jr Glenn G
347A Village St
Concord, NH 03303
(603) 753-4381
Attorneys, Legal Service Plans
Heiser Richard W
347 Village St # A
Concord, NH 03303
(603) 753-4381
Attorneys
Donovan Michael
72 N Main St
Boscawen, NH 03303
(603) 224-4230
Attorneys
Daskal T
296 Manchester St
Manchester, NH 03103
(603) 627-4129
Attorneys
Garrity Paul J
309 Pine St
Manchester, NH 03103
(603) 626-3010
Attorneys, Insurance Attorneys
Paul J Garrity Law Offices
309 Pine St
Manchester, NH 03103
(603) 626-3010
Insurance Attorneys, Attorneys, Criminal Law Attorneys
Halvorsen Law Ofc
1 Sundial Ave Ste 510
Manchester, NH 03103
(603) 626-0200
Insurance Attorneys,  Attorneys,  Legal Service Plans,  Litigation & Tort Attorneys
Leahy Peter J
347 Village St
Concord, NH 03303
(603) 753-0001
Attorneys, Legal Service Plans
12Law.com   |  NASHVILLE, TN USA   |  CONTACT US