Explain why you chose to have your llc taxed

Assignment Help Business Law and Ethics

Reference no: EM133198571 , Length: word count:500

LLCs are a very common business organization structure for many small businesses in the United States as they offer the limited liability benefit of a corporation combined with some of the benefits of a sole proprietor or partnership (greater flexibility, less formality, no double taxation). In this activity, you will walk through the steps to form an LLC in California.

Assume you are creating an LLC in California. Complete the following documents for your LLC:

Question 1. Articles of Organization - complete the Form LLC-1, for your LLC; the first pages are instructions/information, you only need to complete the last page

Question 2. Operating Agreement - complete the template operating agreement, for your LLC

The Operating Agreement may look like a lot and can be overwhelming, but what you need to complete in the template are the following items:

Name, date, and address on Page 1 (in several places)
Is it a single-member of multi-member LLC? You pick, but understand the difference between the two.
Who are the members (aka owners), and what are they contributing to the LLC? Again, you pick.
Taxation: will the LLC be taxed as a partnership or a corporation? You pick, but understand the difference between the two.
Management: will the LLC be member-managed or manager-managed? Again, you pick, but understand the difference between the two.

Question 3. Statement of Information - complete the Form LLC-12,for your LLC; the first pages are instructions/information, you only need to complete the last page

You can make up all of the information to complete these documents, however, make sure you understand what is included in each document.

In addition to completing the forms and operating agreement, in a separate word document, type up a brief explanation about why you made the decision you did for each of the following items:

Taxation: explain why you chose to have your LLC taxed as a partnership or a corporation; make sure to specifically address the difference between taxation of a partnership and taxation of a corporation
Management: explain why you chose to have your LLC be member-managed or manager-managed

Reference no: EM133198571

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