Limited Liability Companies and Financial Advantages
Limited liability companies offer substantial tax savings compared to schedule S and C corporations. One way that LLC formation facilitates this is that - unlike corporations …show more content…
When an LLC owns property in different states, and the owner passes away, the estate must settle probate in each state. This is a complex, expensive and lengthy process. A living trust can circumvent these proceedings, allowing the owners heirs to take ownership immediately without extensive legal procedures.
Overall, a living trust can save expenses and time normally lost when a business owner transfers business assets through a will. The living trust also helps to clarify future business interests and prevents any contests as to who is eligible to take over a limited liability company and its profits. As for tax savings, a living trust is normally only advantageous if the business owner is passing interest to a spouse.
One other advantage that placing an LLC into a living trust affords is that the company transfer is private. When an entrepreneur wills their company assets to an heir, the document is public record and accessible by anyone with the wherewithal to find the information or happen across the mandated announcement. In contrast, the law does not require that individuals or entities make living trust arrangements public.
Limited Liability Company Legal …show more content…
For this protection, the interested parties must form the limited liability company before litigation arises. An LLC is an entity unto itself, and any debts or liens placed on the company will not attach to the registered company owners assets in most instances. The only assets that normally remain at risk are those owned by the LLC.
A limited liability company also offers more operational flexibility compared to a corporation. For corporations, the government requires entrepreneurs to maintain a specific organizational structure. LLC operators are free to run their organization as they choose unless the founders set forth specific guidelines to the contrary in the articles of incorporation. LLCs are easier to manage and maintain than S and C corporations. The government does not require limited liability companies to follow strict reporting guidelines such as those imposed on full-fledged corporations. LLC operators do not have to conduct regular meetings and keep meeting records as with S and C corporations. Because a limited liability company is an entity unto itself, it will continue to exist beyond the owners’ lifespan or investment into the company just as if it was a