| When it comes to business, different kinds of | | | | advantages. If you want to know more, read on... |
| organizations could be set-up. This helps determine the | | | | One of the best features of LLC is the "limited liability" |
| extent of liabilities of the owner/s, as well as, how the | | | | provision. What does this means? This means in cases |
| division of assets and contribution of investments are | | | | of legal suits and other claims against the business, the |
| done. | | | | owners can protect themselves financially against the |
| The simplest form is called the single proprietorship. | | | | said claims. Creditors or other people cannot run after |
| Proprietors are sole bearers of the liabilities involved in | | | | their personal assets. Unlike In sole proprietorship and |
| the business. However, the owner alone can pocket | | | | partnership, the proprietor or the partners will absorb |
| the profits. There is also partnership. This may be | | | | any claims against the business. |
| composed of two or more owners. In here, profits and | | | | Another benefit of LLC is taxation. In here, the way an |
| losses are shared among the partners or owners. | | | | owner can be taxed is very flexible. If there are |
| Moreover, if one partner withdraws or dies, the | | | | multi-owners, they can elect a corporate taxation. Why |
| partnership will be dissolved and the assets will be | | | | is corporate taxation an advantage? This is because |
| liquidated. There is also an organization called a | | | | taxes for the first $75,000 of the company taxable |
| corporation. In here, the owners and the corporation | | | | income is lower the rates of the personal income tax. |
| are separate legal entities. Owners are called | | | | As a result, everybody can save money from paying |
| shareholders as they invest through stocks and | | | | taxes this way. Aside from that, in LLC there is no |
| liabilities can be absorbed by the entity. If one | | | | double taxation. This means an individual cannot be |
| shareholder bails out, the corporation will continue to | | | | paying both the corporate tax and individual tax at the |
| exist. | | | | same time. |
| In real estate, rental business can take form of any of | | | | Aside from that, forming LLC is not hard to do. A |
| the three mentioned above. Most of the time, landlords | | | | single proprietor can apply for LLC anytime just as |
| run as single proprietorship. However, there may be | | | | long as he or she follows the steps and requirements |
| times when landlords would plan to engage in an | | | | in applying. If multi-owners, these people need not be |
| organization where they could both benefit from tax | | | | too formal about it. |
| and other legal problems. They enter in an organization | | | | Judging the way this company operates, the ultimate |
| that is considered a hybrid form of partnership and | | | | benefit of having this structure is flexibility. A small-time |
| corporation. This is called the Limited Liability Company | | | | business owners can enjoy flexibility in sharing of |
| or LLC. | | | | income and taxes while getting the protection against |
| Why do property owners enter in this kind of set-up? | | | | their personal assets. No wonder why people use this |
| As mentioned above, it has certain tax and liability | | | | strategically to minimize liabilities. |