Comments on: More on LLCs

By: David G. Cohen

David G. Cohen — Wed, 13 Jan 2010 22:16:04 +0000

interesting. thanks.

By: Bill

Bill — Wed, 13 Jan 2010 22:08:27 +0000

David - one item that you are not considering with LLC's vs C corps is the impact of new laws with the patriot act. We are a startup but the original founders are from around the world. We started off creating a C Corp, but we couldn't because two of our partners are located in Australia. Based upon the new laws with the Patriot Act - foreign nationals cannot have ownership in C Corps. The only option available to us for the type of company we incorporated under was the LLC.

By: Jim

Jim — Tue, 31 Mar 2009 01:58:09 +0000

One thing I know for sure is that an LLC and S corp allow you to asorb a lot of expenses that you cant personally with getting hit with AMT.

By: Jim

Jim — Tue, 31 Mar 2009 01:56:57 +0000

I guess I dont understand the double taxation issue. If I make a million dollars "profit" at abc, inc I am taxed at ~ 35% in the corp. If I then withdraw the $650k as a dividend I pay the dividend tax of 15-20%, soon to go much higher under Obama I assume. Correct? effective tax rate is over 50%, no?

By: Jim

Jim — Tue, 31 Mar 2009 01:56:13 +0000

I guess I dont understand the double taxation issue. If I make a million dollars at abc, inc I am taxed at ~ 35% in the corp. If I then withdraw the $650k as a dividend I pay the dividend tax of 15-20%, soon to go much higher under Obama I assume. Correct? effective tax rate is over 50%, no?

By: springstage

springstage — Mon, 30 Mar 2009 13:33:07 +0000

S is an election on a C corp. You can unelect S any time quite easily. Going from S to LLC is the same as going from C to LLC - you can't “convert”, you have to create a new entity and transfer stuff.

By: Derek Scruggs

Derek Scruggs — Mon, 30 Mar 2009 13:29:08 +0000

We're an LLC, but we don't expect to raise VC. If I were starting a company today I'd prob do it as an S and then convert if necessary. Do you know if it's hard to go from S to LLC?

By: You kids and your LLCs | Colorado Startups

You kids and your LLCs | Colorado Startups — Mon, 30 Mar 2009 00:08:13 +0000

[...] I posted More on LLCs two days later as a follow [...]