2 overlooked key facts about Limited Liability Companies (LLCs)
LLCs have rapidly risen to become the preeminent entity of choice among small and midsize businesses. Let's look at some key facts in regards to this entity.
#1 LLCs are a legal entity created in accordance with state statute.S-Corporations are a tax election allowed by the federal tax code, which may or may not necessarily be similarly allowed by state/or local tax laws. This makes LLCs as very similar to Corporations who are taxed by default as C-Corps for federal tax purposes.
#2 LLCs are growing in both number of entities and legal significance.In contrast, S-Corps are seeing decline/lack of growth, in their number, and a somewhat diminished legal significance. However, it is highly unlikely that LLCs would replace S-Corps as the optimal way to conduct activities for large swaths of midsize and larger type of businesses.