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For business owners, the main reason why you should form a LLC is because of “Pass Through” of profits and losses.
This means that, by default, LLC’s do NOT pay taxes. All income and losses pass-through to YOU as a member.
This means that, by default, LLC’s do NOT pay taxes. All income and losses pass-through to YOU as a member.
If you have losses in your LLC, you can claim it against your personal income on your individual 1040.
GREAT option for start up businesses
GREAT option for start up businesses
If you’re starting a company, it may be beneficial to start one as an LLC and write off the initial losses from your personal income and change election to a corporation when the company becomes more profitable.
Your business assets are also protected under a LLC.
Your business assets are also protected under a LLC.
“LLC HELD Assets” 
cannot he seized by a member’s creditor. Even if the creditor gets a judgement against a member, the creditor can’t get the property owned by the LLC!
this is WHY most people of prestige place their personal assets in a LLC!
The creditor has what’s known as a charging order remedy.
Which means if the creditor gets a judgment against a member of the LLC, the creditor is ONLY allowed to collect any actual cash distributions that are made by the company to the member.
Which means if the creditor gets a judgment against a member of the LLC, the creditor is ONLY allowed to collect any actual cash distributions that are made by the company to the member.
If NO distributions are made to the member, there is ZILCH to collect
This is why Operating Agreements are crucial to your business, as well!
This is why Operating Agreements are crucial to your business, as well!
