CFP

By Investopedia AAA

Characteristics and Income Taxation of Business Entities - Limited Liability Company

Limited Liability Company (LLC)
The limited liability company is a flexible enterprise structure that provides the benefits of both a partnership and corporate entity.


Pertinent data of Limited Liability Company:
Liability: Limited
Nature of Owner's Income: Self-employment income
Federal Tax Forms used: Form 1065, 1120, 1120S or 1040+Schedule C (varies)
Compensation reported: Schedule K-1

Advantages:
Limited liability without having to incorporate
Pass-through income taxation
No double taxation

Disadvantages:
No personal loss deduction for owner or partner
No business continuity
Multiple income tax returns (one for the LLC and one for the partner)

Corporations

You May Also Like

Related Articles
  1. Trading Strategies

    A Guide Of Option Trading Strategies ...

  2. Trading Strategies

    Why & How To Reevaluate Your Trading ...

  3. Investing

    The Biggest Threats to Netflix

  4. Trading Strategies

    Effective Risk Control With Scaling ...

  5. Chart Advisor

    3 Basic Material Stocks Poised For A ...

Trading Center