Friday, March 18, 2016

Pros & Cons Of An LLC

When you're setting up a business at the Lake of the Ozarks, choosing the right business entity is absolutely critical. Your business entity will impact the way your company's income is taxed, the way important decisions and processes must be handled, and how its eventual sale or dissolution must be conducted. A limited liability company (commonly abbreviated as "LLC") is a particularly popular business entity with a unique set of advantages. However, it also comes with its share of potential drawbacks. This week, O'Donnell Law Center explores some of these pros and cons.


PROS
  • An LLC can have an unlimited number of members.
  • Owners of an LLC can enjoy greater flexibility than those with other business entities. Unless the operating agreement outlines specific procedures for a certain task, owners are able to structure their company in whatever way best meets their needs.
  • Members/owners are protected with "limited liability," which helps to protect them personally from the liabilities of the business.
  • LLCs are not requires to have a board of directors or hold annual meetings. This allows for less paperwork and less of the "red tape" that is commonly associated with other business types.
  • An LLC is considered a separate entity that can continue to exist even if the owners pass away.
CONS
  • Owners of an LLC are often faced with "pass-through" taxation, where each owner's personal tax return reflects the company's profits and losses.
  • Without a strict operating agreement, LLCs may experience problems down the road as a result of their more relaxed requirements.
  • Members' undistributed profits are taxable to the members.

Curious To Learn More About How An LLC May Benefit Your Business? Contact Us!

If you are considering starting your own company and are interested in learning more about how an LLC may be able to benefit your company, contact our business attorney in Camden County MO. We would be more than happy to talk with you. Stop by our Center or give us a call at 573-552-0317.


We Carry Your Burden ~ You Carry On With Life.

Disclaimer: No attorney-client relationship is created by the publication of this blog.


The choice of a lawyer is an important decision and should not be based solely on advertising.


Phone: (573) 552-0317

O'Donnell Law Center, LLC
1026 Palisades Blvd. Suite 3

Osage Beach, MO  65065

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