TO LLC OR NOT LLC, that is the question. LLCs are becoming a more popular form of business structure (especially in Louisiana) for businesses. But you have to be careful that you do more than just go to the attorney’s office to sign paperwork.
You have to make sure you understand the tax ramifications of forming an LLC. If you are not careful you could pay more than 33% tax on any profits at the end of the year.
LLCs can be taxed a either a: (1) a super sole-proprietorship, (2) partnership, (3) CCorp, or (4) SCorp. Which form you choose has a huge impact on your taxes at year-end.
IRS gives you relief should you, for example, formed your LLC in 2011 as a pure LLC, but later you would like your tax treatment to be more favorable. You guessed it. You need to file another form. And IRS gives you up to 24 MONTHS to file provided the right language is used on the form.
Correctly set up, an LLC can have a great positive impact on you and your business. Properly maintained an LLC can shelter your personal assets from lawsuits, and is exempt from paying Louisiana franchise tax.
This information is brought to you by Rabalais Business Consulting and Wayne Rabalais. This firm is a BBB accredited service provider. Wayne Rabalais has been in business over 25 years, and sits on the NFIB Louisiana Leader Council. You can reach Wayne at 337-981-2577 or by email at firstname.lastname@example.org