LLC's (Business Law)

Tax Aspects

Your limited liability company will not be subject to federal income taxes unless you elect to have it taxed like a regular corporation. Usually the owners of the company do not elect corporate tax treatment and instead pay tax on its income as if it were a partnership. Your lawyer can help you determine whether to elect to have your limited liability company taxed like a corporation. You will need to file IRS Form 8832 with the IRS if you decide to have your company taxed like a corporation.

Another tax benefit of a limited liability company is the treatment of capital contributions to the company. As a general rule, investments in the company do not result in any tax on the company or its owners. In addition, the company may generally distribute cash or property to its owners without tax consequences.

Some states impose local income and franchise taxes on limited liability companies. A lawyer can help you determine whether your company will be subject to any state or city taxes.