LLC’s Disadvantages

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The main disadvantages of LLCs are: LLCs are relatively new entity types and that fact adds uncertainty as to how they will be treated in the courts. Further, states differ as to how certain LLCs will be treated. Not all states recognize single member LLCs for example. So if your business grows there may be […]

LLC’s Advantages

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LLCs have additional advantages, including: LLCs do not need to have a Board of Directors. LLCs do not need to hold annual meetings or record meeting minutes (though recommended). Generally less administrative paperwork and record keeping. Owners do not need to be U.S. citizens or permanent residents. Unlike Limited Partnerships where a limited partner who […]

Comparative Anaylsis

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Corporations, LLPs and LLCs (Entities)(not S/P’s or P/shp’s) have many advantages, including: Independent legal structure separate from the owners. Help separate owners’ personal assets from their business debts. Owners have limited liability for business debts and obligations. Owners can be individuals or other entities or combinations thereof. Perpetual existence, unlike sole proprietorships and partnerships which […]

Personal Service Corporations

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In the 1960’s and 70’s many professionals incorporated their businesses for liability protection and other reasons although professional malpractice was not such a reason. Unfortunately, prior to 1987, the graduated tax brackets went up to 70% and professionals sought ways to avoid those high taxes. They found relief in the personal service corporation which imposes […]

Close Corporation

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A “closely held corporation” and a “close corporation” are not the same things. Typical of both is that they are corporations with few shareholders whose corporate shares are not traded on a securities market and whose owners take an active role in management. The IRS defines a closely held corporation as one that is not […]

The Most Common Business Practices – Limited Liability Partnership

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Limited Liability Partnership In 1994 the State of Ohio passed legislation to recognize the legality of the Limited Liability Partnership, with a minimum of two participants, called “Associates” rather than “Partners.” To become a Limited Liability Partnership (LLP) a partnership files a registration application with the Secretary of State. The partnership name must contain the […]