Updated time: Jul 31, 2018 , 17:08 (UTC+08:00)
- All members are bound by an operating agreement.
- The operating agreement determines all issues in the company.
- The members may manage the company themselves or they may hire an external manager.
|There are 3 tiers of power:
- Shareholders – own the company
- Directors – manage the major business actions
- Officers – carry out day-to-day business activities
- IRS considers a single-member LLC to be a disregarded entity and a multi-member LLC to be a partnership.
- The entity/partnership must fill in a Federal Tax ID number (also called an employer identification number or EIN).
|IRS taxes in 3 different ways:
- C-corporation – pays taxes on profits each year and may
choose to distribute dividends to shareholders. If the
shareholders are a small, tight-knit group, this is often
referred to as double taxation.
- S-corporation – the tax liability on the profits and losses
of the company are passed through to the shareholders.
They must pay the taxes.
- Tax exempt – the company must file IRS Form 1023
and qualify for tax-exempt status by engaging in a
qualifying charitable, religious or public-service purpose.
- No annual report required
|Annual report must state:
- the corporation’s physical address
- all directors’ names and addresses
- one officer’s name and address