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A limited liability company (LLC) is a business structure that offers limited liability protection and pass-through taxation. Limited liability is where the losses a business may incur are limited to the amount invested in that business. How to Start an LLC: Complete Guide | Wolters Kluwer wolterskluwer.com expert-insights how-t wolterskluwer.com expert-insights how-t
At what income level is an LLC worth it?
Theres no hard and fast rule, says Keren de Zwart, a business attorney who runs Not Your Fathers Lawyer out of Irvine, California, but if your business is netting at least $60K in profits, thats usually a good time to formalize into an LLC or corporation because the tax benefits can really start to be utilized
What is the downside to an LLC?
One possible downside of an LLC is the obligation to pay taxes on earnings. As a member of an LLC, you must pay taxes annually on your portion of the companys profits regardless if those profits remain within the business.
At what point should you get an LLC?
If your business already earns a profit or if it carries any risk of liability, you should start an LLC immediately. Many folks say you should form an LLC once you earn over $100,000. However, many lawyers insist you start an LLC from the get-go.
Who benefits from LLC?
A limited liability company (LLC) separates a company from its owners, protecting the owners from any financial losses, debts or legal liabilities that the business may incur.
Related Searches
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People also ask
Is my LLC an S or C Corp?
A major disadvantage of an LLC is that owners may pay more taxes. When setting up as a pass-through to owners, they are subject to self-employment tax. Self-employment tax ends up higher compared to being taxed as an employee. What are the advantages and disadvantages of an LLC? calkinslawfirm.com what-are-the-advantages-an calkinslawfirm.com what-are-the-advantages-an
What is the downside of an LLC?
Profits Taxed Individually Each Year One possible downside of an LLC is the obligation to pay taxes on earnings. As a member of an LLC, you must pay taxes annually on your portion of the companys profits regardless if those profits remain within the business.
How does an LLC protect you?
LLCs can be a good choice for medium- or higher-risk businesses, owners with significant personal assets they want protected, and owners who want to pay a lower tax rate than they would with a corporation.
Related links
Limited liability company (LLC) | Internal Revenue Service
Feb 14, 2025 A Limited Liability Company (LLC) is a business structure allowed by state statute. Each state may use different regulations,
limited liability company (LLC) | Wex - Law.Cornell.Edu
Limited Liability Company (LLC) is a non-incorporated business organization that retains elements of both partnerships and corporations. The LLC form allows
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