Campbell, Thomas H.
January 1994
Journal of Financial Planning;Jan1994, Vol. 7 Issue 1, p25
Academic Journal
The growing availability of the limited liability company (LLC) is due to the unique features it provides business owners, particularly owner's of closely held businesses. It is the only business entity available that allows every member, including managers, to enjoy limited liability while the entity is treated as a partnership for federal income-tax purposes. This article describes the legal nature of an LLC and reviews the requirements necessary to ensure that the LLC enjoys favorable tax treatment. The key factors that favor the use of the LLC compared with other business entities are described. Finally, practical pointers for avoiding potential problems with the use of LLCs are identified, and several situations that are particularly well suited for LLCs are explored.


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