If you are wondering whether or not a limited liability company is right for you, Nolo's Quick LLC is the book to grab. Written by LLC expert Attorney Anthony Mancuso, this book shows you, in plain English, the advantages and drawbacks of forming an LLC, and how the LLC compares with running a business as a corporation, partnership or sole proprietorship. It explains: how LLCs are formed by filing Articles of Organization with the state the Operating Agreement, which details the legal rights and responsibilities of LLC members and managers how you can choose between a member-run or manager-run LLC important tax options that qualify an LLC for partnership tax treatment -- an essential benefit of forming an LLC the required ongoing legal and tax paperwork Practical, concise and easy to read, the 2nd edition of Nolo's Quick LLC provides vital – and the latest – information you need to know about this valuable business option.

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The LLC is a relatively new and highly popular alternative to the five traditional ways of doing business: as a sole proprietor, a general partnership, a limited partnership, a C (regular) corporation and an S corporation. In this book I'll not only explain how LLCs work and why so many small business people are forming them, but I'll also discuss the advantages and disadvantages of each of these other business forms, comparing them to the LLC (see Chapter 2 for these comparisons). By and large, the business media have heralded the arrival of the LLC with unabated enthusiasm. Is this fanfare justified? Yes. The LLC is the first business ownership structure that allows all owners of the business to quickly and easily achieve the dual goals of "pass-through" tax treatment (the same tax treatment sole proprietors and partnerships receive) and limited personal liability protection (which means owners aren't personally liable for business debts and claims). I'll explain how each of these LLC attributes work in Section A. A VERY SHORT HISTORY OF THE LLC The LLC is the U.S. version of a type of business organization that has existed for years in other countries. Specifically, it closely resembles the German GmbH, the French SARL and the South American Limitada forms of doing business, all of which allow small groups of individuals to enjoy limited personal liability while operating under partnership-type rules rather than the more complex tax rules that apply to corporations. In the U.S., the Wyoming legislature enacted the first LLC legislation in 1977, followed by Florida in 1982. In those days, doing business as one of these new-type business entities was risky, in part because the IRS had not yet made it clear whether it would tax an LLC as a partnership or a corporation. In fact, because the central promise of the LLC -- to enjoy the tax status of a partnership with the personal liability protection of a corporation -- seemed almost too good to be true, few business owners were brave enough to avail themselves of this new business model. Similarly, most other states were unwilling to pass legislation authorizing LLCs until the IRS gave its approval. The first big break in the LLC stalemate came in 1988, when the IRS ruled that an LLC formed under the Wyoming statute was eligible for pass-through tax status. This nod of approval from the IRS created an immediate national wave of enthusiasm for LLCs in the business press, with the result that all 50 states plus the District of Columbia quickly adopted LLC legislation. But it wasn't until January 1, 1997, that LLCs really went mainstream. That's when the IRS threw out its old and unnecessarily complicated tax classification regulations, agreeing that multi-owner LLCs could henceforth enjoy partnership tax status (and that one-owner LLCs could be taxed as sole proprietors) without the need to jump through a bunch of previously required technical hoops. And even better, the IRS decided to give LLC owners the flexibility to change their tax status by electing corporate tax treatment if they decided this would save money on taxes. (I'll have more to say on this special and important corporate tax election in Chapter 4, Section C.)

 

Introduction 1. An Overview of LLCs 2. The LLC vs. Other Business Structures 3. Members’ Capital and Profits Interests 4. Taxation of LLC Profits 5. LLC Management 6. Starting and Running Your LLC: The Paperwork 7. Getting Legal and Tax Help For Your LLC Appendix A.State-specific Information Appendix B. Sample Operating Agreement Appendix C. Checklist for Forming an LLC Index

Attorney Anthony Mancuso Attorney Anthony Mancuso is a corporations expert and author of Nolo’s bestselling corporate law series. He is the author of How to Form Your Own Corporation for California, New York, Florida and Texas; How to Form a Nonprofit Corporation (National and California Editions); The Corporate Minutes Book; California Incorporator (software) and co-author of Nolo’s Partnership Maker (software) and How to Create a Buy-Sell Agreement & Control the Destiny of Your Small Business. His books and software have shown over a quarter of a million businesses and organizations how to incorporate.

 

Nolo's Quick LLC by Anthony Mancuso
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