Business Entities - What is a LLC?

The Limited Liability Corporation is governed by Subchapter K of the Internal Revenue Code.  It is a hybrid business entity that provides its owners with the limited liability of a corporation and the tax benefits of a partnership.  For tax purposes, a LLC is a "flow through" entity in that all profits, losses, gains and deductions "flow through" to the individual owners'/members' individual tax return. If the LLC is properly formed and operated according to the state law then the members are not personally liable for the debts and obligations of the business.  This particular entity must have at least two members but some states allow single member formation.

An operating agreement is usually adopted by the members detailing company operations, distributions, transfer of interest, and liquidations.  All members may elect to participate in the management of the business or may agree to hire a manager to conduct the affairs of the business while the members maintain indirect control of the organization.

To set up a LLC, the members/owners must file with the state.  The filing should include the business name, the registered agent along with the names of those managing the organization.  To learn more about forming a LLC click here - File your incorporation or LLC right – from the small business experts at Intuit, maker of Quickbooks and TurboTax

Are Your RE Holdings Held In A LLC?

Are your real estate holdings held in a Limited Liability Corporation? Are you keeping up with the necessary paperwork involved in maintaining your entity? If you were audited by the IRS today, would you be able to produce your LLCs Articles of Organization, meeting minutes or other docmentation required to maintain your entity? When auditing small businesses that are designated as LLCs or even SCorporations the IRS is requesting your organizational documents as part of their audit. If you're unable to produce this information or have failed to maintain it, then you'll lose your LLC or SCorp status along with all of the benefits associated with these entities.

Running a business is difficult enough without all of the administrative tasks involved.  As a small business owner you barely have enough time to run and grow your business so some of these administrative tasks fall by the wayside.  However, these tasks are important and should not be neglected.  You should consider outsourcing these tasks to someone who specializes in working with LLCs and S Corporations who can handle the administrative tasks as well as your accounting needs. 

SFS Group specializes in working with LLCs and SCorporations by taking care of their accounting and finance as well as handling the administrative tasks involved in maintaining the integrity of their organization.  Any one can handle these tasks for you but an organization that specializes in working with real estate investors and landlords as well as LLCs and S Corps will be more beneficial. By specializing in this area, SFS Group is very knowledgeable about what is required for these specific small businesses.