How is a LLC better than a general partnership?
mūdi asked:
Asides from the fact that it shields you from personal liability, what are the benefits of an LLC?
Asides from the fact that it shields you from personal liability, what are the benefits of an LLC?
Can’t a general partnership write-off the business expenses etc?
Thanks in advance!
December 29th, 2011 at 12:02 am
no other benefits really and a lot more paperwork and tax prep hassle, plus requirement of annual meetings and related crap
a gen ptr IS a business - any form of business can deduct normal business expenses - only real diff with a ptrshp compared to a corp is - any money the partners withdraw is not “payroll expense or wages” - all profits from the partnership get shared by each partner on their 1040’s (after filing the 1065 partnership return)
December 30th, 2011 at 9:54 pm
Another advantage of incorporating is continuance. Unlike a sole proprietorship, a corporation has an unlimited life span; the corporation will continue to exist even if the shareholders die or leave the business, or if the ownership of the business changes.Having Ltd., Inc., Ltee., or Corp. as part of your company’s name may increase your business, as people perceive corporations as being more stable than unincorporated businesses. If you’re a contractor, you may also find that some companies will only do business with incorporated companies, because of liability issues.