Limited Liability Company (LLC): The LLC is a statutory entity, sanctioned and registered with State Corporation Commissions just like a Corporation, and like a Corporation, the LLC pays a similar yearly registration fee. As with Corporations an LLC must have a Resident Agent (one who resides in said State) from the State in which the LLC is formed. This is applicable only for those member/partner or partners who are not residents of the State in which the LLC is registered. If the LLC is registered in the State you reside in, you are considered to be the Resident Agent. (LLC=s are valid in all 50 states, and each state has their own LLC requirements).

An LLC is also like a Limited Partnership, in that it has a similar basis on income reporting and is taxed in a similar manner. However, unlike a Limited Partnership , the member/partner or partners of an LLC does not assume the liability of the actions of the LLC as do partners of a Limited Partnership.

The LLC combines the function of member/partner or partners and most states have a requirement of a least two (2) member/partners (However, there are some states which allow its LLC to have only one (1) member/partner).

Additionally, LLC member/partner or partners or any entity may be a partner/member or partners i. e. Partnerships, Trusts, Corporations, other LLC=s, and of course individuals. Either a member/partner or partners can manage and operate the LLC, or someone can be hired specifically as the Manager of the LLC. 

This is based on the LLC Operating Agreement (a private document). Neither a member/partner or partners are liable for actions of the LLC. The LLC and the member/partner or partners are seen as distinct and separate entities. This is where the safety for the member/partner or partners lies.

Taxes: The fundamental difference in the tax treatment of Partnerships, LLC=s, and Corporations is that the Corporation is taxed as a separate entity with its own tax rate whereas the Partnership and LLC are taxed as an extension of the individual. 

In a Partnership, or LLC the total income is taxed only once, directly to the member/partner or partners. Partnerships and LLC=s must distribute any tax liability to member/partner or partners all taxable income (after costs are adjusted). The member/partner or partners having received the tax liability via the distribution/s zeros out any tax liability of the LLC.

An LLC may operate and conduct business individually or with any other business entity or individual.

Please contact us if you are interested in having an LLC formed for your use. We can do so at a very reasonable cost. 918-459-9637, ask for Bob or Craig.


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