A Michigan Limited Liability Company (LLC) May Be the Perfect Entity for Your New Business
Limited liability companies offer investors and business owners a new alternative for doing business. Although limited liability companies have existed in some states for more than ten years, they did not become popular until the Internal Revenue Service began to tax them as partnerships rather than as corporations.
Limited liability companies provide the limited liability of corporations without many of the corporate formalities. Potential users of limited liability companies include:
•Start-up businesses
•Estate planners
•Venture capital organizations
•Joint ventures
• Real estate ventures
• Subsidiary companies
Although a limited liability company is not appropriate for every business, you should consider whether it makes sense to use a limited liability company whenever you start a new venture or restructure an existing business. The benefits of limited liability companies include their favorable tax treatment, limited liability, flexible management, and relaxed formality.
Generally speaking, the laws for limited liability companies are usually less burdensome than the state corporation statutes and stringent tax laws that govern Subchapter S corporations. As a result, Subchapter S corporations have administrative requirements and costs that do not apply to limited liability companies. For example, any person or company may own an interest in a limited liability company while Subchapter S corporations may not have shareholders that are corporations, nonresident aliens, or partnerships. Owners of limited liability companies also have greater ability to allocate income and losses in their taxes than shareholders of a Subchapter S corporation.
Of couse, you should always check with a lawyer before deciding what type of entity to use for your business. If you would like more information, feel free to contact me via my website: http://www.hamblinlaw.com
