why would someone go from a inc to a llc?

Question

just wondering why someone would change their busines name from a inc to a llc? This is not the most honest person around so I am wondering if it would have something to do with that?

Answer 1

There may be some tax benefits involved. A Corporation (Inc) has to pay Federal and state taxes on what it makes - at a rate higher than most personal income tax rates. Profit from a Limitied Liability Company (LLC) is taxed as personal income. That is a simplistic view, and there are a lot of other variables and possibilities, but if he's paying 42% tax rate on Corporate profit and can cut it to 30% on LLC profit, it's an obvious way to go.