Lesson 2 – What is L.L.C.?
To simply put it, two parts of a corporation (INC) limited liability company. The limited liability company (LLC) does not have two direct boards but has members which serve as partial owners backed by equity share certificates. One unique feature about LLC is that it does not issue shares outside but is only exclusive to its private member managers. The proceeds or profits can be then agreed as whether it is as equity or equally shared. When it comes to the liability of the business, it can be agreed as equal spit or shared. A limited liability company has advantages when it comes to shifting of tax, for example the Single-member LLC whereas several LLC can be established to transfer the tax liability to the next LLC up, it is called the “Pass Through Entity”, it is a method formed to consolidate debt or expenses for rights to write-offs solely for off-setting the company’s expenses. (An LLC doesn’t go public with the IPO)
A C-Corp Corporation (INC) is a kind of corporation which is subject to double taxation. So, if you are one of the business owners who run this kind of business and happen to receive employment in the company via day-to-day operation, once your share is handed out of the net profit, there is a possibility that the money is
taxed through the expenses, in short, it is subject to another tax. Conversely, if you avoid the day-to-day operation and send your stock payment, it will result in the net profit being nontaxable (Own nothing, control everything). The S-Corp Corporation (I.N.C.) on the other hand is a type of business subject to a single taxation. It is mostly taxed individually through its owners or partners by means of liability.