Although Wyoming was the first state to allow the formation of a limited liability company, the benefits of this business structure are now available throughout the United States. The Atlanta area is a growing metropolitan area with many entrepreneurs and small business owners. A person starting a business may wonder what business entity to select.
In the late 1970s, Wyoming became the first state to allow the formation of a limited liability company, which is most commonly known as an LLC. An LLC allows a person to form a business, with the liability protection of a corporation but without double taxation. For tax purposes, the IRS the treats an LLC like a partnership or sole proprietorship.
The members of an LLC report income from an LLC on their income tax return as income. This taxing structure differs from other business structures like a corporation. With specific corporate structures, the business pays taxes on income, and then the owners pay taxes on income they receive from the company. This process is known as double taxation. The LLC member avoids this double taxation.
The LLC, like a corporation, allows liability protection to its members. A properly formed LLC will protect the personal assets of its members. The LLC exists separate from its members. An LLC is allowed to form agreements, own property, and even sue, all in the name of the LLC. The person or persons starting a business can form an LLC and conduct business as the LLC. The formation of an LLC allows them to protect their personal assets and allows ease of transactional items like purchasing a property. A small business owner starting out should contact a business law lawyer. They can help you create your LLC, so you can get your business started.