Kamzz Llc (2024)

FAQs

Can someone own 100% of an LLC? ›

Any person or company can own an LLC, and that person or company is called an LLC Member. A person/company is still an LLC Member whether they own 100% of the LLC or 1% of the LLC (or less).

Pros and Cons of LLC (Limited Liability Corporations)

You have the flexibility of being taxed as a sole proprietor, partnership, S corporation or C corporation. As an LLC member, you cannot pay yourself wages. High renewal fees or publication requirements can be pricey, depending on your state.

Because an LLC is a separate entity, the owners of the company have limited liability. This is one of the most important benefits to operating as a limited liability company. Limited liability means that the individual assets of LLC members cannot be used to satisfy the LLC's debts and obligations.

LLCs must be run according to the Operating Agreement.

However, if the Manager or members regularly disregard the Operating Agreement, the LLC may look like a sham.

LLCs are considered “pass-through entities,” which means the LLC itself does not pay federal income taxes on business income. Instead, income “passes through” to individual members of the LLC, who pay federal income tax earned from the LLC via their own individual tax returns.

If you don't want to be in business with other people and dont't want separate business tax filings, a single-member LLC is the choice for you. On the other hand, if you're going to be regularly working with other people and want a more formal structure, a multi-member LLC is the right choice.

By forming an LLC, only the LLC is liable for the debts and liabilities incurred by the business—not the owners or managers. However, the limited liability provided by an LLC is not perfect and, in some cases, depends on what state your LLC is in.

LLC owners are known as “members.” LLC laws don't place many restrictions on who can be an LLC member. LLC members can therefore be individuals or business entities such as corporations or other LLCs. It is also possible to form a single-member LLC whose only owner is another LLC.

Disadvantages of creating an LLC

Cost: An LLC usually costs more to form and maintain than a sole proprietorship or general partnership. States charge an initial formation fee. Many states also impose ongoing fees, such as annual report and/or franchise tax fees. Check with your Secretary of State's office.

Are LLCs worth it? ›

Without an LLC or other business entity, your personal assets are at risk if your business is sued for something a co-owner or employee does. An LLC's operating structure also helps to avoid conflict and misunderstandings between you and your business partners.

The key concept associated with the taxation of an LLC is pass-through. This describes the way the LLC's earnings can be passed straight through to the owner or owners, without having to pay corporate federal income taxes first. Sole proprietorships and partnerships also pay taxes as pass-through entities.

Income and losses pass through the corporation to the owners' personal tax returns and are taxed at the owner's individual rates. Your LLC profits are taxed at your individual income tax rates—just like when your LLC is taxed like a sole proprietorship.

The primary benefit of turning your side hustle into an LLC is personal asset protection. If something were to go horribly wrong while pursuing what you thought was a weekend passion that brought in a few extra dollars, your personal assets could be at risk.

The Bottom Line. LLCs are a good combination of protection with flexibility and tax benefits. It provides an array of taxation alternatives while shielding individual members from personal liability.

If you've ever formed an LLC, you likely realize how much easier it is to form and maintain an LLC over a corporation. There are fewer filing and reporting requirements for LLCs, and when it comes time to pay taxes, LLCs typically have fewer steps and a lower burden than corporations.