Question

5 reasons why limited liability companies does not want to be treated like a corporation ?

Answer 1

ANSWER:

-- Double Taxation: The LLCs owners receive more of their profits in company as compared to the shareholders as they can avoid the "double taxation" of corporate profits

-- Pass Through' Taxation: LLCs enjoy "pass through" taxation which indicates that the company itself pays no taxes and rather it passes the profits and losses through the proportion to their shares of equity to its owners. In corporations the shareholders do not get any personal financial relief from any losses of the company

-- Less Paperwork: Compared to corporation LLCs has less paperwork in it's formation. Also LLCs can create rules that govern the business

-- Flexibility: In LLCs the government doesn't get too indulged in the inner workings. The can sell and buy their ownership, restructure management, or change and they have no requirement to report it to their state. They are not regulated in an approach the corporations are

-- Flexible number of members: LLC has a flexible structure for management however it is strict in a corporation