Why is a LLC is important for your business?

[Bill Dickson]

Where do you go in your county to apply for a LLC.?

A LLC has so many tax advantages for your business. So why doesn't everyone? Even as a wholesaler you need advantages.

[Account Closed]

Originally posted by @David Dachtera:

@Bill Dickson,

@Account Closed is partly right. Business entities and entity structures complicate things, but they help protect you from litigation and provide unique tax advantages if they are set up properly.

 David, I'm going to disagree with you on this one.

An LLC does not protect you from litigation. If someone is going to sue you, it doesn't matter if you are operating as a sole proprietor, LLC, S-Corp, Partnership or Corp. The bottom line is, they're going to sue you. Litigation is litigation.

With relation to tax advantages - it can go both ways....

A Single Member LLC isn't going to provide you with any tax advantages. In fact, it will provide you with tax disadvantages if you consider state and local taxes (such as occupation taxes like we have in various Colorado municipalities or even Business & Occupation taxes in jurisdictions like Washington or Gross Receipts taxes in jurisdictions like New Mexico, Hawaii, etc., etc.)

An S-Corp is going to create complications in the form of local taxes as mentioned above as well as "reasonable compensation" issues and payroll taxes.

A C-Corp is going to create complications as mentioned in both instances above on top of personal holding company issues if applicable.

The bottom line is, everyone's situation is unique and they need to discuss that personally and confidentially with their attorney.

As a person that owns a single member llc, which is owned by another single member llc...if I see a great deal in Texas, I'm looking at an immediate ~$1,000 tack on overhead cost for foreign business registration fees plus additional expenses for filing another state return and additional accounting costs.  As an individual, I could buy that property in Texas and add it to my umbrella policy and be good to go.

It all depends on each individual's unique situation.