What's the difference between a LLC, LLP, and Inc?
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LLC: A limited liability company has members (similar to a partnership) who may directly manage the company or who may vest management in one or more managers. It combines features of a partnership and a corporation. "Ownership" of the LLC is reflected in the individual "member's interest," i.e., the member's share of the profit and losses of the company, rights to receive distribution of assets, and to participate in the management of the company.\n\nLLP: A limited-liability partnership (LLP) is similar to a general partnership, except the partners are not personally liable for negligent acts conducted by other partners or employees not under their supervision.\n\nInc: A corporation is a legal entity that can exist separately from its owners. Creation of a corporation occurs when properly completed articles of incorporation (called a charter or certificate of incorporation in some states) are filed with the proper state authority, and all fees are paid.
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Word to the wise ....If your company nets less than $150,000....stay a sole prop...if it is more, it is time to consider going inc. Keep in mind, there is more paperwork when it comes to all your taxes and you will need a great CPA. Also look at the profit margin for your last few years, How tight was it... Did you break even or make money. You will be slapped with a franchise tax but it will be over a year away because it is based on your previous years income. MORE TAXES....UGH! I would also complete a risk assessment. R U in a company or business that could very easily become victim to a lawsuit??? If so, INC is the way to go! Protect your personal assets! Good Luck and I hope this helped!!!
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It is fairly easy really. You may want to contact an Accountant or Attorney to set it up or you can do a search Online for forming an LLC in your state. You can do it yourself but depending on your level of understanding in the matter it may be worth it to hire someone experienced to help you. Do a little reading on the matter
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* Attorney\n* Do it yourself\n\nIf you do it yourself, go to the Secretary of State web site for the relevant site, e.g., Texas, and look for forms. They should have the form for the Articles of Incorporation. (However, you might not want a corporation, and might want an LLC or an LP. To make this decision, talk to your CPA or an attorney.)
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For corporation tax purposes a company includes a limited liability company incorporated under the Companies Acts (plc or limited) as well as members' clubs and unincorporated associations.\n\nA company for these purposes does not include a partnership, a local authority or a local authority association.
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a limited liability company or limited liability partnership has the advantage of the partners possessing limited liability (can't go after their assets), but also have the advantage of bypassing double taxation. They're only taxed at the individual level. (However it is expensive to set up a LLC)
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You define it.   One is big enough.   Define your corporation, it's board, it's membership requirements, the products, mission, services.   It's a free country.  \n\nYou do not need any legal thing.  Down the road, you and your board of directors will define your organization clearer, and decide what corporate structure that you need.    A simply DBA might do the trick for many years.   But if you want to attain a non-profit status, you might have to incorporate further.   \n\nJust get started and DO something.
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SOLE PROPRIETORSHIPS and PARTNERSHIPS\n------------------------------------------\nFor many new businesses, the best initial ownership structure is either a sole proprietorship or -- if more than one owner is involved -- a partnership.\n\nA sole proprietorship is a one-person business that is not registered with the state as a limited liability company (LLC) or corporation. You don't have to do anything special or file any papers to set up a sole proprietorship -- you create one just by going into business for yourself.\n\nLegally, a sole proprietorship is inseparable from its owner -- the business and the owner are one and the same. This means the owner of the business reports business income and losses on her personal tax return and is personally liable for any business-related obligations, such as debts or court judgments.\n\nSimilarly, a partnership is simply a business owned by two or more people that hasn't filed papers to become a corporation or a limited liability company (LLC). No paperwork needs to be filed to form a partnership -- the arrangement begins as soon as you start a business with another person. As in a sole proprietorship, the partnership's owners pay taxes on their shares of the business income on their personal tax returns and they are each personally liable for the entire amount of any business debts and claims.\n\nSole proprietorships and partnerships make sense in a business where personal liability isn't a big worry -- for example, a small service business in which you are unlikely to be sued and for which you won't be borrowing much money for inventory or other costs. \n\n\nLIMITED PARTNERSHIPS\n--------------------------\nLimited partnerships are costly and complicated to set up and run, and are not recommended for the average small business owner. Limited partnerships are usually created by one person or company, the "general partner," who will solicit investments from others -- who will be the limited partners.\n\nThe general partner controls the limited partnership's day-to-day operations and is personally liable for business debts (unless the general partner is a corporation or an LLC). Limited partners have minimal control over daily business decisions or operations and, in return, they are not personally liable for business debts or claims. Consult a limited partnership expert if you're interested in creating this type of business.\n\n\nCORPORATIONS and LIMITED LIABILITY CORPORATIONS\n-------------------------------------------------\nForming and operating an LLC or a corporation is a bit more complicated and costly, but well worth the trouble for some small businesses. The main benefit of an LLC or a corporation is that these structures limit the owners' personal liability for business debts and court judgments against the business.\n\nWhat sets the corporation apart from all other types of businesses is that a corporation is an independent legal and tax entity, separate from the people who own, control and manage it. Because of this separate status, the owners of a corporation don't use their personal tax returns to pay tax on corporate profits -- the corporation itself pays these taxes. Owners pay personal income tax only on money they draw from the corporation in the form of salaries, bonuses and the like.\n\nLLCs are similar to corporations because they also provide limited personal liability for business debts and claims. But when it comes to taxes, LLCs are more like partnerships: the owners of an LLC pay taxes on their shares of the business income on their personal tax returns.\n\nCorporations and LLCs make sense for business owners who either 1) run a risk of being sued by customers or clients or run the risk of piling up a lot of business debts, or 2) have a good deal of personal assets they want to protect from business creditors. \n\n\nNONPROFIT CORPORATIONS\n---------------------------\nA nonprofit corporation is a corporation forme
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limited liability where the general partner would have liability, but the rest of the partners are not liable for anything. if incorporated, nobody can sue one person. it all falls to the company.
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You mean a limited liability company?  Unless the LLC elects to be taxed as a 'C' corporation (and very few do, so yours probably didn't), the company doesn't pay taxes at all so there is no tax rate applicable to the LLC.\n\nThe right question is, if you're a member in an LLC, what rate of tax will you pay?  The answer is, whatever tax bracket you fall into personally, including income you received from the LLC.\n\nBut keep in mind, there is an additional "self-employment tax" of I believe 15.3%.  This tax applies to any money you receive from the LLC (up to I believe $85,000 or 87,000) and is in ADDITION to the income tax you would pay on that same income.
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LLCs\n"Most people think that LLCs are probably the wave of the future," says Mark Luscombe, principal analyst for the federal and state tax group at CCH, an electronic and print publisher of tax and business legal information. "It's gradually supplanting other forms, except for companies that eventually are interested in going public."\n\nAdvantages: LLCs, like corporations, provide business owners with liability protection. That is, debtors will go after company assets, not your personal assets. That's a step up from partnerships and sole proprietorships when your personal assets may be used to settle a business debt. Unlike corporations, LLCs don't suffer from double-taxation, in which the corporate entity is taxed and then its shareholders' dividends are taxed as well. This benefit applies to LLCs that are classified as partnerships for tax purposes. An LLC tax preparer simply checks a box on his or her federal return to indicate how the organization will be taxed. Some states' tax laws mirror the federal government's treatment of LLCs.\n\nEarnings and losses pass through to the owners and are included on their personal tax returns. There's also less paperwork involved with running an LLC than a formal corporation: "No year-end minutes, no notification of shareholders of meetings and so on," says Dan Zabludowski, a partner with the law firm of Litow, Cutler & Zabludowski, an LLC with offices in Coral Gables and Fort Lauderdale, Fla.\n\nFinally, LLCs are the most flexible when it comes to organization. For example, there are fewer rules regarding who can be a shareholder. They also tend to be more informally run than a regular corporation.\n\nDisadvantages: Tax liability for an LLC varies by state. So if your company is going to operate in several different states, you'll have to know how they treat LLCs before electing to choose this type of corporate structure. An LLC also can't go public, so if you're the owner of a dot-com that envisions an initial public offering down the road, incorporation is a better route to take. Otherwise, you'll have to switch your company from being an LLC to being a corporation. That can add to the cost of your IPO.\n\nLawyers, who are less familiar with the newer LLCs than regular incorporation, also may charge more for helping you form an LLC than another corporate structure.\n\nThe cost of launching an LLC also varies by state. Some states charge more for a LLC than to incorporate, some charge less and some charge the same rate regardless of what form of corporate structure that you choose. A few states even charge special annual fees for LLCs. Finally some states require two or more partners for an LLC so if you're going into business solo, this business format is not for you.\n\nIncorporations\nA new business can form a C corporation or an S corporation. According to some press reports, the number of S corporations that are sprouting is actually surpassing the formation of C corporations in part because of the advantages inherent with S corporations. Most businesses just starting out will opt for the S classification.\n\nAdvantages: Unlike LLCs, both S corporations and C corporations can go public. For that reason, venture capital companies prefer to work with corporations rather than with LLCs. S corporations, like LLCs, don't suffer from double taxation. C corporations may face double taxation, but they can have incentive stock option plans.\n\nDisadvantages of corporations: As mentioned previously, C corporations face double-taxation, but S corporations also have drawbacks. Their chief disadvantage is that the number of shareholders that an S corporation can have is capped at 35, according to Zabludowski. In addition, there are limitations on who can be a shareholder in an S corporation, adds Simon Lincoln, a solo law practitioner in New York City. "S corporations can't have a corporation or a fo
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Or as a corporation. Partnerships and sole proprietorships are the only business organizations that subject owners to personal liability. However, if you organize as a corporation or as a limited liability company, the company and the individual are treated as separate entities. It's cheaper and less confusing to do an LLC.\nNOTE: Be advised, however, that there is  a legal phenomenon called "piercing the veil" which means that is someone is using a company (LLC or corporation) to perpetuate a fraud, even though the personal assets of the owner typically would not be able to be taken because of the business form, a court can touch those assets if found guilty of using the business organization to do "bad stuff".
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A limited liability company, commonly called an "LLC," is a business structure that fits somewhere between the partnership or sole proprietorship and the corporation. Like owners of partnerships or sole proprietorships, LLC owners report business profits or losses on their personal income tax returns; the LLC itself is not a separate taxable entity.\n\nLike a corporation, however, all LLC owners are protected from personal liability for business debts and claims -- a feature known as "limited liability." This means that if the business owes money or faces a lawsuit for some other reason, only the assets of the business itself are at risk. Creditors normally can't reach the personal assets of the LLC owners, such as a house or car. (Both LLC owners and corporate shareholders can lose this protection by acting illegally, unethically, or irresponsibly.)\n\nFor these reasons, many people say the LLC combines the best features of both the partnership and corporate business structures.
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Limited Liability Company 101\n\nAs a business owner, you will be faced with many important decisions, including what business structure to use in your company formation. While many countries allow the typical structures of sole-proprietorship, partnership, or corporation for business ownership, Americans have the ability to form a limited liability company. \n\nWhat is a Limited Liability Company? \n\nA limited liability company (LLC):\n\n\nis a type of business ownership combining several features of corporation and partnership structures is not a corporation or a partnership may be called a limited liability corporation, the correct terminology is limited liability company owners are called members not partners or shareholders number of members are unlimited and may be individuals, corporations, or other LLC's.\n\nAdvantages of Limited Liability Company\n\nLimited Liability: Owners of a LLC have the liability protection of a corporation. \n\nNo Minutes: Corporations are required to keep formal minutes, have meetings, and record resolutions. The LLC business structure requires no corporate minutes or resolutions and is easier to operate. \n\nFlow Through Taxation: All your business losses, profits, and expenses flow through the company to the individual members. You avoid the double taxation of paying corporate tax and individual tax. Generally, this will be a tax advantage, but circumstances can favor a corporate tax structure.\n\nDisadvantages of Limited Liability Company\n\nLimited Life: Corporations can live forever, whereas a LLC is dissolved when a member dies or undergoes bankruptcy.\n\nGoing Public: Business owners with plans to take their company public, or issuing employee shares in the future, may be best served by choosing a corporate business structure.\n\nAdded Complexity: Running a sole-proprietorship or partnership will have less paperwork and complexity. A LLC may federally be classified as a sole-proprietorship, partnership, or corporation for tax purposes. Classification can be selected or a default may apply.\n\nSetting-up a Limited Liability Company\n\nAll 50 states now allow the formation of LLC`s. Forming your own LLC may not be as simple as a sole-proprietorship, however, the process is much less than a corporation. There are two main actions:\n\n1. Articles of Organization: If you plan to set up a limited liability company, you will have to file articles of organization with the Secretary of State and pay the required fees. Articles may be prepared by a lawyer or filed yourself.\n\n2. Operating Agreement: Although it is not required in many states to draft an operating agreement, it is advisable. Much like corporate by-laws or partnership agreements, the operating agreement can help define your company profit sharing, ownership, responsibilities, and ownership changes. \n\nEach state has different rules governing the formation of a limited liability company. For instance, in North Dakota, a foreign LLC is not allowed for banking or farming. Some states will want a publication notice with the local newspaper that a company has been formed. Check with your local state office for further details.\n\nThis article should provide you with the basics of limited liability companies and help guide your decision of company business formation. Each state's laws differ as well as each company situation. It is advisable to seek tax and legal counsel to determine the best choice for your individual circumstance.
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Yes, an LLC can be a member of another LLC.
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Its all about cya.  In an Inc, the owners can have their personal property taken away.  An LLC is designed to shield the personal property of the owners from lawsuits and bankruptcy.
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The article "LLCs vs. C Corporations" http://www.powerhomebiz.com/vol97/llcs.htm shows the differences and similarities between the two legal structures.\n\nOther articles that can help you decide the best legal structure for your business can be found at: http://www.powerhomebiz.com/startup/legal.htm\n\nStarting a small business takes a lot of courage. But, as they say, courage does not pay the bills. To be successful – to stay in business – you need more than courage. You need a combination of hard work, skill, perseverance, and lots of luck. \n\nSome things you need to consider:\n- "How can I support my family while I build up by business?" \n- "What are my abilities?" \n- "Is there a market for the product or service I have chosen?" \n- "How long will it take this business to reach the financial goal I have?" \n\nYou may want to read the article "How to Start a New Business Successfully" http://www.powerhomebiz.com/vol51/launch.htm , which lists six steps to launch a new business successfully:\n\n1. Provide a benefit.\n2. Determine the fit with your market.\n3. Right timing is everything\n4. Be ready to support your business\n5. Develop a blueprint for success\n6. Market, market, market\n\nI recommend that you read the following books:\n\n- What No One Ever Tells You About Starting Your Own Business : Real Life Start-Up Advice from 101 Successful Entrepreneurs \n- Starting From Scratch: How To Start A Business When You Don't Have Money \n- If You're Clueless About Starting Your Own Business and Want to Know More \n- On the Move : How to Succeed and Survive As an Entrepreneur \n- How to Make 1000 Mistakes in Business and Still Succeed \n\nYou may also want to read the articles:\n\nHow to Start a Successful Consulting Business http://www.powerhomebiz.com/vol83/consulting.htm\nSeven Keys to Building a Profitable Consulting Business http://www.powerhomebiz.com/vol5/consulting.htm\n\nAlso check out the following consulting specific books to help guide you as you start your consulting business\n\n- Getting Started in Consulting \n- The Consultant's Quick Start Guide: An Action Plan for Your First Year in Business \n- How to Make It Big As a Consultant \n- The Seven Cs of Consulting: Your Complete Blueprint for any Consultancy Assignment \n- Million Dollar Consulting, New and Updated Edition: The Professional's Guide to Growing a Practice