A limited liability company is an excellent asset protection tool. As a business entity, company owners ' personal assets are not affected by corporate responsibility. Commercial assets are also protected from the responsibility of their owners. If the company is facing litigation, LLC will protect the owner from liability related to commercial transactions. In addition, when the owner is sued by an individual, there are provisions in the law that protect assets within the LLC from being designated as satisfying the judgment. LLC is very useful when used to reserve real estate.
A limited liability company ["LLC"] is a non-corporate company that, according to its structure, has limited liability protection for all owners, and all owners can contribute to management and control. In the United States, a limited liability company offers a variety of tax options for its owners. For tax purposes, a single member limited liability company is considered a sole proprietorship [a neglected entity]. For two or more owners, a limited liability company is taxed as a partnership rather than a company and is used for federal income tax. A limited liability company can be taxed as a company or even a company. By combining limited personal liability with partnership tax classification, LLC can provide advantages that are not available to businesses, partnerships or limited partnerships.
Limited liability company protects real estate
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LLC provides asset protection, making it the preferred choice for real estate investment. LLC combines liability protection with active partnership tax treatment. In general, real estate ownership creates liability for tenants and customers for injuries, leases, contracts, environmental laws, mortgages, and other laws, but limited liability companies are beneficial when they are used to own assets that generate passive income.
Tax and limited liability company
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When the LLC has the appropriate structure, it can be classified as a federal income tax partnership. It can assign taxes to its owners, including income, earnings, losses, debt and credit, in accordance with its operating agreements.
There is no tax incentive for a limited liability company that is taxed as a partnership or a limited partnership. The main advantage of LLC over limited partnerships is the limited liability protection offered to all LLC owners and managers. The mission of a limited partnership is to have one or more general partners who are personally responsible for the partnership debts and obligations. However, as discussed below in the Family Limited Partnership, a general partner may be a company, limited liability company, trust or other business entity that provides protection to senior family owners by not having to be a general partner. A limited liability company provides asset protection to its owners, whether or not they are involved in managing and controlling the company's business.
The limited liability company is very flexible and can be used for estate planning. Most of the limited liability companies can be owned by children of non-administrative owners, while parents manage the company. In a business agreement, a non-business owner becomes a manager if the parent is incapacitated or dies. In the absence of traditional asset transfers, the estate tax is cancelled and the duration of the limited liability company can be permanent.
Orignal From: Limited Liability Company (LLC) in the Asset Protection Plan
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