What to know about the LLC structure

On Behalf of | Sep 4, 2020 | Uncategorized

There is a good chance that Georgia law will allow you to structure your company as a limited liability company, or LLC. Individuals or entities who have an ownership stake in your company will be referred to as members. It is usually permissible to be the only member of your LLC, and in such a scenario, your company will be treated as a disregarded entity.

Almost anyone can own a piece of your LLC

Individuals, domestic corporations and other LLCs can purchase or otherwise acquire equity in your LLC. Foreign entities may also be able to become members of your company, and there is no limit to the number of members a company can have.

You can modify your company’s tax treatment

By filing Form 8832, you can elect to have your company treated like a corporation for tax purposes. If your business has two owners, it will likely be treated as a partnership by default. Disregarded entities are still treated as separate from their owners for excise and employment tax purposes.

An election to change your organization’s tax treatment cannot take effect more than 75 days prior to filing Form 8832. Additionally, it cannot take effect more than 12 months after the date that the document is filed.

Forming an LLC may have significant implications for your company both now and in the future. Therefore, it may be a good idea to talk to a business law attorney prior to making the decision to do so. A legal representative may be able to help you learn more about disregarded entities, how to change your tax status or whether a person or entity is allowed to be a member. You may also be able to contact the IRS if you have any questions about federal tax laws.