And here it is- part 3 of a 3 part series on the ABC’s of Limited Liability Companies with the Central Illinois Business Leaders Podcast. Listen to the podcast episode here.
Voting Rights in LLCs: Who Has a Voice?
On average, 4 million new businesses are started each year in the United States. Many of those businesses are organized as limited liability companies (LLCs). Combining the benefits of a corporation and a partnership, an LLC protects its members’ personal assets from business liabilities, avoids double taxation, and provides flexibility regarding its operations, management, and financial and voting rights. While …
The Business of Marriage: Considerations for Married Business Owners
Owning a business can impact every area of a person’s life. The impact is uniquely felt within a marriage. Married business owners must consider the ways in which their marriage may impact their business and vice versa. Failure to think about how these two significant institutions interact can have unforeseen consequences—everything from addressing time management to distribution of liability may …
Ask Cari: Limited Liability Companies and Form 1099 Reporting
Business owners typically dislike dealing with the tax reporting, filing, and payment requirements associated with running a business. It can be tedious and require attention to numerous details. For businesses that have made payments to vendors and independent contractors, the type of tax reporting required and the form it should take are often overlooked and confusing. Specifically, it requires understanding …
Understanding Corporate Management: Who Is Really in Charge?
When you decide to form a business, one legal entity type you can choose is the corporation. The corporation is one of the more complex but also one of the most trusted legal business forms. A key consideration is the way a corporation is managed: it has an intricate structure, built-in oversight, and a somewhat flexible ownership scheme. Corporate structure …
Understanding How LLC Members Pay Taxes
Limited liability companies (LLCs) are one of the most popular types of business entities. The LLC’s flexible taxation options are one reason it is preferred; LLC members can, for the most part, choose how they would like to be taxed. The LLC enjoys this flexibility because the Internal Revenue Service (IRS) does not recognize it as a distinct entity for …
Ask Cari: LLC’s vs. LLP’s
If you are starting a new business, the type of business entity you decide to establish will have an impact on the extent of personal liability, how the business is taxed, its management, the level of formality required, and many other factors. There are a wide variety of options, which can make this decision quite overwhelming. Limited liability companies (LLCs) …
LLC Operating Agreement: Is a Non-Compete Clause Necessary?
You and several friends start a new business and decide to operate it as a limited liability company (LLC). Now that you’ve completed the first step—choosing a business entity—it is now important to prepare an operating agreement. The operating agreement is a contract which governs the operations of the LLC and sets forth the arrangements made among the members, including …
LLC Management: Who Should Run the Shop?
Determining who will manage the day-to-day affairs of your business is an important decision. You need to know, at the outset, who will manage operations, both for the success of your business and because the Limited Liability Company (LLC) operating agreement demands it. Luckily, LLC operating agreements are very flexible and the management structure can be tailored for your business. …
LLC Members: What You Need to Know about Your Fiduciary Duties
As a member of an LLC, you may owe a fiduciary duty to the company. The two key fiduciary duties are the duty of loyalty and the duty of care. Whether you have a fiduciary duty will depend on the LLC’s management structure and whether you have management responsibilities. Understanding your duties is essential to avoiding liability. What is a …
5 Reasons Your Single-Member LLC Needs an Operating Agreement
An operating agreement is a contract that controls your LLC’s operations as well as member interaction with each other and with the LLC. You may think that an operating agreement is not necessary for your single-member LLC – after all – why make an agreement with yourself? Is the Operating Agreement a Legal Requirement? Most states don’t require an LLC …
Chart on Illinois Business Entities
This helpful chart for Illinois business entities was used for a speaking engagement last spring with Illinois Farm Bureau. It illustrates some of the major differences among different choices of business entities in Illinois including but not limited to sole proprietorship, general/limited partnerships, limited liability companies (including series LLC’s), and corporations. I’m a visual person so I love charts and …