Why are limited liability companies so popular?
Good question.
LLCs are so popular because they allow you considerable flexibility in their profit sharing.
After you make your initial filings with the state, and create an operating agreement with your other member owners of the LLC, that operating agreement, which is similar to a partnership agreement, designates who controls the company, who has access to the funds, and who makes material decisions.
In a law school or business school, they'll tell you that a partnership is when two or more people get together basically to earn money or to make a profit and LLCs have their origin in partnership law but evolved to allow single member LLCs.
What is nice about using an LLC as your entity is that you can in most states file as a single owner LLC. For example, you can go to Texas and file as single owner LLC.
So with a single-owner LLC is when you file your 1040, which is your individual tax return in the United States of America, you can just put your single-owner LLC income right into schedule C of the 1040; you don't even have to file a 1065 partnership income tax return with the IRS because it's just one person. That's what's fantastic: If you have a single-owner LLC, you just file with your individual social security number—that's your taxpayer number—on your 1040 as an individual on your LLC information.
If you have a partner in an LLC, both of you would file the 1065 partnership returns. You would probably apply for a taxpayer ID number for that particular LLC, which isn't necessary for a single owner. If you want to have access to a company 401(k), and you want to set up such for your LLC at a broker-dealer like Schwab or Bank of America, you're probably going to have to seek and receive a taxpayer ID number from the Internal Revenue Service, which is part of the Department of Treasury here in the United States.
I offer education and training to new investors, landlords, engineers, doctors and dentists, and many others that would like to learn how to enjoy the benefits of investing as quickly as possible. If that sounds interesting contact my office by going to www.benjaminzmiller.com and fill out the contact form.
You also can register at meetup.com at the link below:
https://www.meetup.com/benjamin-z-millers-investor-networking-group/
I hope that helps and good luck with your investing!
Benjamin Z Miller
www.benjaminzmiller.com
1-817-203-4160
ben@benjaminzmiller.com
https://www.linkedin.com/in/benmillersells/
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