| In the rush to embark on a new entrepreneurial | | | | employees? |
| adventure, people often overlook the importance of | | | | One form of entity that has gained significant popularity |
| taking the time to select the proper entity in which to | | | | is the limited liability company-also known as the "LLC". |
| structure their business. Selecting the proper entity has | | | | An LLC is formed by filing a Certificate of Organization |
| both tax and non-tax implications that require every | | | | with the Department of State and can have as few |
| business owner to engage in proper planning and | | | | as one "member" (owner). Some of the key |
| consult with tax and legal professionals. | | | | characteristics of an LLC include: |
| Before ordering inventory, hiring employees or printing | | | | -very flexible structure; |
| up some fancy business cards, every business owner | | | | -can be taxed as a partnership |
| should ponder these issues: | | | | -members of the LLC are not liable for debts and |
| 1. How will the business be managed? | | | | liabilities of the LLC |
| 2. How will ownership interests be transferred? | | | | -less formalities than a corporation |
| 3. Does the ownership structure need to maintain | | | | -no annual fee for members |
| flexibility? | | | | -operating agreement controls the relationship of the |
| 4. What happens if an owner dies, retires, or files for | | | | members |
| bankruptcy? | | | | Whether you select an LLC, a corporation, an LP, or |
| 5. How will owners be compensated? | | | | some other business entity is an important |
| 6. What are the tax consequences to owners who | | | | consideration that is best dealt with well in advance of |
| invest capital in the business? | | | | the start of your new business. Be sure to meet with |
| 7. To what extent will owners have liability for debts | | | | an accountant and an attorney, who are experienced |
| and conduct of the business? | | | | in business formation, to review which entity will best |
| 8. How will profits be taxed? | | | | help you achieve your business goals. |
| 9. What type of benefits will be extended to | | | | |