2007-05-20 09:54:42 · 3 answers · asked by kal h 1 in Business & Finance ➔ Corporations
An LLC is not treated the same as a partnership except that each is a pass through entity. That means the income or loss is passed onto the owner/partners and is taxable to them only.
An LLC can be a single person, while a partnership has multiple owners with unique stakes in the organization. It is governed my the uniform partnership act and must have a partnership agreement or face court action when its assets must be disposed.
An Inc. pays tax on its income and the owners pay taxes on any income they receive from the corporation. That's double taxation, but the Inc fully separates the owners private assets from the assets owned by the company.
An LLC makes the same separation but without the double tax. It's also only a State form of business. You have to file with the IRS to have your LLC treated as a pass through entity or the IRS will treat is as an Inc for tax purposes.
2007-05-20 10:15:56 · answer #1 · answered by italiatom 2 · 0⤊ 0⤋
A company ending with inc. means that it's a corporation (incorporated) and files a 1120 tax return. An llc is a limited liability company (if someone sues them, just like a corporation, they are limited to the company's assets and cannot sue the owner for his personal assets (like his house)), an LLC is treated like a partnership for tax purposes. A great website which explains this is: http://www.nfib.com/object/IO_20645.html
2007-05-20 10:04:56 · answer #2 · answered by taram 3 · 0⤊ 0⤋
LLC = limited liability corporation. Inc. = Incorporated. Anyone can incorporate. LLC is a means to get partners personally off the hook in the event of a liability claim.
2007-05-20 09:58:09 · answer #3 · answered by regerugged 7 · 0⤊ 0⤋