While there are
many advantages of LLC companies in Georgia, the limited
liability company (“LLC”) is a relatively new legal entity. The
first state to enact an LLC statute was Wyoming back in 1977.
Currently, all 50 states have an LLC statute.
Despite the novelty of the LLC, business people, lawyers and
accountants now consider the LLC as the presumptive entity of choice
for the new business start-up. The LLC laws were specifically
designed to provide new business owners with a legal entity that has
all the advantages of other legal entity choices but without the
disadvantages of those same other entities.
This report summarizes the major advantages of LLC companies in
Georgia over other
entities:
Limited
Liability
All owners of an
LLC are protected from being personally liable for the debts,
obligations and lawsuits of the LLC. This protection basically
states that a member is not liable just because he or she is a
member/owner of the LLC. There are important guidelines and
principles that all LLC companies in Georgia need to know and follow to ensure
that this limited liability protect is not lost.*
Entity
Status
An LLC is its own
separate entity. This means that an LLC is a legal person separate
and apart from its owners. This is important from a business
continuity perspective. If a member, manager or a key employee dies
or leaves the business, the business still continues.
Management Structure Options
LLC companies in
Georgia and all other states can
choose between two simple management structures: (i) member managed
or (ii) manager managed. The LLC laws allow members great
flexibility in deciding how they want the LLC business to be managed
and what rules to impose upon the LLC when it comes to governance
and management.
Informal
Decision Making Procedures
The LLC laws
intentionally impose very little formalities when it comes to LLC
decision-making among members and managers.
Flexibility in Ownership Structure
The LLC laws are
based on contractual flexibility. This means that the laws allow the
Members themselves to decide the ownership structure, right to
profits, voting rights and any other expect of the member
relationships amongst each other and the LLC.
Flexible
Tax Choices
In 1997, the
Internal Revenue Service passed a regulation which provided a high
benefit for LLCs. The regulation, known as the Check the Box
regulations, basically allows for the LLC’s members to choose how
the LLC will be taxed for federal income tax purposes.
For the single member LLC that is owned by an individual, the LLC
can take advantage of having simple sole proprietorship federal
income taxation but without the personal liability of sole
proprietorships. For the single member LLC that is owned by an
entity, the tax choices afford the business freedom from the complex
consolidated return regulations.
For the multi-member LLC, the law allows partnership pass through
taxation without requiring the LLC to comply with all the complex
rules imposed upon a corporation that wants pass through taxation.
At the same, time both single member and multi-member LLCs can
choose to be taxed as a corporation as well.
Accordingly, there are many advantages
to LLC companies in Georgia. When
forming a Georgia LLC, use the fastest and most complete
formation service offered by GeorgiaBusinessFormation.com.
