16427 N. Scottsdale Rd. Ste 410
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Limited Liability Companies or LLC are not a corporation. It is a distinct type of business sometimes referred to as a hybrid company because it combines the corporate advantages of limited liability with the partnership advantage of pass-through taxation.
No, an attorney is not a legal requirement. You can prepare and file the articles of organization yourself; however, you should understand the requirements or Let Lanick save you time and money by setting it u for you.
The IRS does allow one member LLCs to qualify for pass-through tax treatment.
An LLC can be taxed for federal income tax purposes as a partnership, disregarded entity, Corporation or and S-Corporation. An LLC can elect partnership status to avoid taxation at the entity level as an “association taxed as a corporation.” If an LLC is not taxed as a partnership, it will be taxed at the entity level similar to a standard or C corporation.
An LLC is owned by its managers and members. Members are similar to partners in a partnership or shareholders in a corporation, depending on how the LLC is managed. A member will more closely resemble shareholders if the LLC utilizes a manager or managers, because then the members will not participate in management. If the LLC does not utilize managers, then the members will closely resemble partners because they will have a direct say in the decision making of the company. Managers most closely resemble officers in a corporation.
A manager or member’s ownership of an LLC represents their interests, just as partners have interest in a partnership and shareholders have stock in a corporation.
An LLC may be managed by its members (owners) or by selected managers (similar to officers).
If the LLC is to be managed by its members, it operates much like a partnership. Each member has an equal say in the decision making process of the company.
If a manager or managers are elected they act in a capacity similar to a corporation’s board of directors. These managers are in charge of the affairs of the company.
Member management is the normal default rule of state law. This means that if managers are not selected in the articles of organization, the members will direct the affairs of the LLC.