JJ Childers here with a continuing discussion of Limited Liability Companies or LLCs.
An LLC is not a perfect solution, remember that no one legal entity solves all of our concerns. But an LLC doesn’t require all the corporate formalities and corporate paperwork. Therefore the overall hassle and costs of maintaining the LLC are kept to a minimum.
Here’s a quick look at just a few ways an LLC can benefit your overall asset protection, estate planning and tax reduction plan:
Pass-through taxation – no double taxation as with a corporation.
Liquidation if an LLC is generally a tax-free event.
An LLC can potentially reduce FICA taxes for individuals.
No member of an LLC is personally liable for the debts or liabilities of the LLC.
LLC members can participate fully in management without jeopardizing their limited liability status.
LLCs can have a trust or family as a member which can facilitate transference of assets to children and grandchildren.
LLC interests can be gifted to children, reducing the size of the estate to be taxed.
Now before you run out and set up an LLC, you need to know the downsides to LLCs. We’ll look at those next.
