Limited Liability Company (LLC)
A Limited Liability Company (LLC) is a
form of business organization that incorporates components of both a
partnership and a corporation. Specifically, this organizational
structure is treated like a corporation for state law purposes and thus
offers limited liability to its owners. Yet, the limited liability
company is treated by the Internal Revenue Service and by the West
Virginia Department of Tax and Revenue as a sole proprietor if you have
one member or a partnership or corporation for multiple members for
income tax purposes.
Advantages of a Limited Liability Company
- More flexible
than a limited partnership or S-Corporation with similar tax advantages.
- Limited liability
to the members.
- Income is taxable
only once at the member’s tax rate.
Disadvantages of a Limited
Liability Company
- Restrictions to
transferability.
- Life of the LLC
varies from state to state.
- Does not have
stock therefore not transferable.
Limited Liability Company (LLC)
- For-profit only.
- May be fixed term
or perpetual.
- May be single-member or
multiple-member company; members may have authority defined in operating
agreement.
- May be
member-managed or manager-managed.
- Members have equal ownership
unless otherwise defined by agreement.
- Company operated
under articles of organization. Additional provisions may be provided by
operating agreement, or if none is written, then by the provisions of
law.
- Law provides personal
liability protection for members and managers acting in good faith.
- May be taxed as
partnership under federal law, depending on structure.
- Annual report and
attorney-in-fact fee required.
- File Articles
of Organization for Limited Liability Companies.
LLC's in the WV Code
