Summary
Limited liability companies
Accountants should develop a working knowledge of the various operational, tax and legal requirements of limited liability companies (LLCs) to communicate to clients their advantages over traditional business forms. These include limited liability protection for all members, taxation of LLCs as either a partnership or corporation, and flexibility in setting up capital and management structures.See the full content of this document
Extract
Educating your clients about LLCs.
With nearly all states now having in place a limited liability company (LLC) statute, clients across the nation will depend on the accounting profession to inform them about the attributes of the LLC. The accountant not only must be knowledgeable about the tax ramifications but also should be familiar with the operational and legal issues surrounding the LLC. This business form has been hailed as the "new entity of choice," providing the corporate advantage of limited liability while affording the tax advantages of partnership. Further, it affords operational flexibility that some business forms simply cannot offer.
This article examines how an LLC may offer a superior business option over traditional business forms for the entrepreneur client. However, the accountant must realize that LLC statutes differ from state to state, so an understanding of the applicable LLC statute is imperative in structuring the appropriate LLC. Further, once the accountant and client have developed a sketch of the LLC, a tax attorney familiar with LLCs should be used to draft the LLC Operating Agreement. While many states do not require an Operating Agreement, it is quite essential in dealing with the business' operational, legal and tax issues. Further, formation of the LLC is analogous to the formati...See the full content of this document
Sponsored links
