Numerous small businesses today are organized as a limited liability company (LLC). An LLC offers flexibility when organizing the management and economic structure of an entity. Due in large part to this flexibility, the LLC has become the most popular choice of entity to form when seeking limited liability protection for new small businesses. Below we’ve put together some information to help you decide whether to elect to be an LLC taxed as an S corporation.

Key Distinctions between S Corporations and LLCs

When deciding how your small business should be taxed it is important to understand the distinctions between S corporations and LLCs. An S corporation refers to the tax treatment of an entity. An S corporation is not a type…

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If you’ve done any searching online, you’ve probably read that limited liability company (LLC) entity offers flexibility when organizing the management and economic structure of the company. And because of this flexibility, the LLC quickly became the most popular entity to form in order to shield personal assets from business liabilities. One of the areas where LLCs offer flexibility is how to structure payments to owners of the business. Today’s post discusses the fact that owners of an LLC can only be considered “employees” if the LLC elects to be taxed as a corporation.

Can LLC Members be Paid as Employees?

Members (owners) of an LLC cannot be considered “employees” of the business unless the LLC elects to be taxed as a…

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Selling your small business can be an equally exciting and daunting task to undertake. There are a variety of legal complexities in addition to various tax and practical considerations. Today’s post highlights one of those legal complexities: whether to structure the sale as a stock sale or asset sale. We’ll explore some of the key features and distinctions between the two types of sales.

Selling Your Business Through an Asset Sale
In an asset sale, the purchaser is not only buying the assets but also the liabilities of the business. The seller will retain possession of the legal entity, e.g. Joe’s Hardware LLC, and the buyer purchases the individual assets of the company, including equipment, inventory, fixtures, licenses, goodwill, trade names, etc….

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I often talk with small business owners about exiting their businesses. Most of the time, there’s no buy sell agreement and the business owner just wants to be “bought out” at a “fair price.” If all owners agree on terms, the separation can be quick and easy. However, this is rarely how it actually plays out. Instead, owners tend to butt heads and struggle to determine a reasonable price for buying out the withdrawing owner. In some situations, the owners can’t decide on reasonable terms of separation and as a result the business suffers. In order to avoid this mess, it is important that you understand the importance of putting together a simple buy sell agreement. Today I’m revisiting some…

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