SOLE PROPRIETORSHIP

#ECOM Episode 4

We began the month for #increasingknowledge with an introduction to the different business structures available. We considered for episode 3, SOLE PROPRIETORSHIP (Click on the link to read ECOM Episode 3 https://kingsch.at/p/hpc9rz9).

In this episode of the #EntrepreneursCornerOnMonday, we'll be discussing the LLC or Limited Liability Company as a business structure.

WHAT IS AN LLC?
A Limited Liability Company, or LLC is a legal form of business organization with daily activities like a partnership but with limited liability similar to a corporation.

#NB: An LLC is NOT a Corporation
An LLC is sometimes incorrectly referred to as a Limited Liability Corporation. Although an LLC can be taxed as a corporation (see below), an LLC is not formed as a corporation.

HOW TO FORM AN LLC
An LLC is formed in the state in which it operates. An LLC is formed by filing Articles of Organization with the state in which you will be doing business. (A few states use a Certificate of Organization to form an LLC.)

Although most states make it relatively easy to file LLC filing documents online, it's always best to have the help of an attorney to form an LLC.

Along with the required state formation application, an LLC also should have an operating agreement, which defines the purpose of the LLC, how its members work together, and many other details that describe what happens in certain circumstances.

LLC OWNERSHIP
The owners of an LLC are called "members" rather than partners or shareholders. The members draw up an operating agreement (similar to a partnership agreement) by which they run the LLC. A single-member LLC is taxed as a sole proprietorship, while a multiple-member LLC is taxed as a partnership. An LLC can be owned by individuals,

In addition to being owned by one or more individuals, LLC can also be owned by another business entity, including a corporation or another LLC.

LLC TAXATION
An LLC is not recognized as a taxing entity by the IRS. Instead, LLCs are taxed as either a sole proprietorship or partnership, based on the number of members. in either case, it is the individual owners who are taxed, not the LLC; the tax passes through to the owner's personal income tax return.

1. If the LLC has one member, it is taxed as a #SoleProprietorship.

2. If the LLC has more than one member, it is taxed as a #partnership.

3. The LLC can also choose to be taxed as a #corporation or as an S corporation.

We trust that you've been well informed about this business structure? In our next episode, we'll be considering COOPERATION as a business structure.

Let us hear from you. If you have questions, enquiries and contributions, kindly COMMENT in the section below. Remember to LIKE and RESHARE, also.

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