Llc Business Structure

"LLC's a business structure are popular because, similar to a corporation owners have limited personal liability for the debts and actions of the LLC" (Irs.gov, n. d.). Unlike corporations and partnerships that have shareholders an LLC's has members. The members of an LLC can be one person or many, there is no limit on how many member the entity has, An LLC has the benefits of a combination of aspects from both corporation and partnership but with little formality and a lot of flexibility. In addition an LLC also has the protection and advantages that corporations do. A protection that a LLC has is that the personal assets of its members cannot be used to cover company debt. Advantages include following the same model partnerships do when paying taxes. Members of an LLC pay taxes on the income only with no liable to pay corporate taxes as well.

The purpose of Form 8832 is that "a eligible entity uses Form 8832 to elect how it will be classified for federal tax purposes, as a corporation, a partnership, or an entity disregarded as separate from its owners"(Irs.gov, n. d). Form 8832 must be filed by any domestic entity that can be taxed as a corporation and one that wishes to change how they are classified. A foreign entity

That is owned by many individuals with no personal liability but want the benefits of a partnership, one with a single owner who has a limited liability, who wants be separated from the entity and an entity that wants to change the way in which it is classified. Form 8832 must be filed 75 days before the election date and no more than 12 months after. LLC's that are situated in the state of Florida Form 8832 must be filed with the Internal Revenue Service located on Ogden Utah.

An LLC with one owner is considered a disregarded entity when filing federal tax returns. Due to this fact the income and expenses of the LLC can be filed on Form 1040 individual tax return. In addition the appropriate schedules (C) must also be attached. If the LLC's single member is a corporation than Form 1120 or 1120Scan be filed to report their income and expenses of the corporation. However if the LLC does not want to file as a disregarded entity and wishes to do so as a corporation the Form 8832 must be filed.