Tax & Business Services

John F Howes CPA




October 26th, 2008 at 12:07 pm

LLCs, Corporations, Partnerships, Sole Proprietorships and Taxes

There is a lot of confusion about Limited Liability Companies (LLCs) versus other types of business entities.  From strictly a tax standpoint, a limited liability company is not recognized in the Federal tax code.  In other words, a LLC can be a sole proprietorship, a partnership or a corporation (S or C type) for tax purposes.

Generally speaking, a business entity forms a LLC to get the benefits of being protected from lawsuits against your personal assets without having to go through the hassle of forming and maintaining a corporation.

But there are still reasons to incorporate rather than or in addition to forming an LLC.  The circumstances unique to your situation need to be analyzed in order to determine the most beneficial way to operate your business.

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