Hey folks,
Instead of asking a thousand questions here like:
How does the LLC pay it’s members?
How do you get money (initially) into the LLC?
Do you have to file corp tax return when you have several members?
Things like that…
I would like recommendations on a book or site that would answer these types of quesitons.
Suggestions?
Thanks!
Aaron
LLC members can be paid a salary (with all of the payroll tax issus that go along with that) or can take distributions of income from LLC profits. Taxation of these profits depends on how the LLC is taxed. More about this later.
You have to “fund” your LLC to start it. You can choose to fund it liberally, giving it the assets is needs to operate. Or you can loan money to it, having it execute a promissory note to you, making regular payments with interest back to you. I recommend the loan approach, as if something happens to the LLC, you are a creditor; you wouldn’t be able to get invested capital back.
Single member LLCs must choose either corporate or individual (“disregarded entity”) taxation. Multi-member LLCs can choose either partnership or corporate taxation. Further, if you elect corporate tax, you can choose S- or C-Corp. Partnership or Corporate taxation would require a seperate tax return for the LLC.
Which brings me back to the distribution question. Disregarded entities, partnerships and S-corps can make distributions from profits without additional taxes to the owner/partner/shareholders. C-Corp dividends are taxable at the shareholder level (the “double taxation” issue of corporations). Your LLC will follow the tax laws for whatever entity type it chooses for taxation.
As always Mark, thanks for the great info. Is there a “dummy” book out there that you would recommend for this type of question? I would hate to bug you several hundred times a day on stuff like this…I could pick one off the shelf, but I figure that you wizards know best.
Aaron
I don’t know about any books. I just know from experience.
Cool…Thanks…
Anyone else?
Here is a site that might offer what you’re looking for:
Regards,
Patti Porter