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LLC Benefits for Specific Industries

November 19, 2017

Accountant LLC
Accountants & Tax Preparers
Being an accountant isn't as easy as it used to be. Now, you face competition from many fronts - including Internet tax services, at-home software programs, and more. One of the ways to combat this infringement on your territory is to provide your clients with additional services. And the best way to do that is to utilize the outstanding entity formation services provided by our firm.  By working with the experts at Edward F. Younger, you can help clients form a Limited Liability Company (LLC) when it's appropriate for them. What's more, it's no hassle to you. You can simply give them our information and we will set up an appointment to speak with them.

 

Helping Clients Form an LLC

The decision to form an LLC is almost always tax driven. As an accountant, you are in contact with your client on a regular basis in order to prepare tax returns and annual financial statements. You are also asked for advice and guidance, and to make tax-saving recommendations, based on your client's financial situation. At some point, you may be asked to recommend the type of business entity your client should form based on his or her tax situation.

 

Why Choose an LLC?
We find that customers tend to prefer the LLC for its ease of management and tax advantages. LLC's are not required to hold annual meetings and do not issue stock. The owners of an LLC also enjoy pass-through taxation, where each member reports their share of profit and loss in the company on their personal tax return. We can assist you and your client in forming a new LLC in the state of your choice.

 

Arts & Entertainment LLC

Protecting Your Personal Assets
By forming a Limited Liability Company (LLC), business owners can separate and protect their personal assets from the debts and obligations of their business. Business owners in the arts and entertainment industry often inquire about this service because they are seeking to protect personal property like their house, car, savings, and brokerage accounts.

 

Attracting Investors
An LLC may be beneficial to business owners in the arts and entertainment industry who are seeking to raise investment funds. Customers who form an LLC often issue membership interests in the LLC to investors in exchange for money or property, and the investors become members of the LLC. As members of an LLC, the investors may be entitled to certain rights (e.g., voting rights and the right to share in the profits and distributions of the company) and have certain responsibilities with respect to the LLC. We typically recommend that our customers consult with a licensed attorney to obtain advice before issuing interests in the company to investors; SEC regulations may apply.

 

Which State?
In deciding where to form a company, our clients consider many factors, including where their company intends to conduct its business. In addition, when several states are being considered for the place of formation, it is necessary to evaluate multiple items, such as the cost of forming the company in the state, the tax laws and business laws of the state, and whether it will be necessary for the company to qualify to conduct business in one or more other states. Many business owners form their LLC in the state where their company conducts, or intends to conduct, the majority of its business - especially if the company is expected to conduct its operations primarily or exclusively in one state.

 

Construction LLC
Contractors and Construction Professionals
Although both a Limited Liability Company (LLC) and a corporation can protect a licensed professional's personal assets, we find that most business owners are choosing to form an LLC for their business entity. An LLC can offer construction companies more freedom than a corporation in the management of the business, since an LLC's operating agreement can set forth or limit the rights, powers, and obligations of managers and members. An LLC also may not require some of the formalities of a corporation, such as annual meetings. In addition, an LLC has the tax advantage of pass-through taxation, with members reporting their share of the profits or losses on their personal tax returns.

 

About Business Licensing
Generally, our customers in the construction industry obtain a business license from the state, city and/or township offices in the location where the work is taking place. More than one license is sometimes required. Customers who are electricians or plumbers or are engaged in another specialty trade should consult the regulatory body that oversees their specific trade for licensing requirements. Not all states have the same requirements for licensure, and the requirements vary from state to state.

 

About Workers' Compensation
Workers' Compensation is a system created by each of the states to provide benefits to workers who are injured while working. These benefits may include medical care, temporary disability payments and compensation for permanent disabilities. Workers' Compensation laws vary significantly by state, and whether a company is required to obtain Workers' Compensation insurance will depend upon statutory law where the work is being performed. Generally, if a company has one or more employees, it will be required to obtain and maintain Workers' Compensation insurance for its employees.

 

About Business Insurance
We find that many of our construction industry customers purchase and carry business insurance to provide liability and other protection for their business. Personal or homeowners insurance often will not provide sufficient protection for even a small, home-based construction business. Issues such as whether it is beneficial for the company to obtain business insurance, the type of insurance to obtain, and the appropriate amount of insurance coverage will vary significantly based on the activities of the construction company. Insurance plans should be discussed with an insurance agent, but we can assist in the formation of a new LLC to help construction professionals separate and protect personal assets.


Consulting LLC
Protecting Your Personal Assets
For business owners who serve as consultants, protecting personal assets like a house, car, savings, and brokerage accounts is typically crucial to their operations. By forming a Limited Liability Company (LLC), consultants can separate and protect their personal assets from the debts and obligations of their business.

 

Where Are Taxes Paid?
Generally, in determining whether or not a consulting company must file tax returns or pay taxes to a particular state, the state considers the connection, or "nexus," that the company has to the state.  In making such a determination, states typically consider factors such as the frequency and magnitude of services the company provides in a particular state or for clients in a particular state, or whether the company has a physical presence in a particular state, such as employees who conduct business activities or an office located in that state.

 

Where to Form an LLC
When choosing their state of formation, consultants should consider many factors, including where their company intends to do business. Many business owners form their LLC in the state where their company conducts, or intends to conduct, the majority of its business. It is also prudent to evaluate the cost of forming the company in the state, the tax laws and business laws of the state and whether it will be necessary for the company to qualify to conduct business in one or more other states. A company may also have to obtain a separate business license to conduct business in certain states or municipalities.

 

About Business Insurance
We find that many of our consultant customers purchase and carry business insurance to provide liability and other protection for their business. Consultants often conclude that personal or homeowners insurance will not provide sufficient protection for even a small, home-based consulting business. Issues such as whether it is beneficial for the company to obtain business insurance, the type of insurance to obtain, and the appropriate amount of insurance coverage will vary significantly based on the activities of the consulting company.

 

Benefits for Attorneys & Legal Professionals
Attorneys & Legal Professionals may Partner with Our Firm
Time and resources challenge small law firms. Small firms are trying to build their practices and accommodate the legal needs of their clients with just one or two attorneys. Our law firm customers look for ways to spend more time researching the law, rather than filing out incorporation paperwork. Small law firms often find it cost prohibitive to hire an additional employee and would prefer to outsource specific work to a trusted partner like Edward F. Younger. We can help your practice grow while saving you time and money.

Partnering with Us
By availing yourself of the resources and the experts at Edward F. Younger, you have the opportunity to expand the products and services that your practice offers to your clients. Through your conversations with your clients, you provide them with the information they need to make an informed decision about the formation of a business. From there, we can handle the paperwork and filing of the documents with that state. Consider us an extension of your firm.

 

Real Estate LLC
Protecting Your Personal Assets
Are you a real estate investor? Did you know that you could protect your personal assets by forming a Limited Liability Company (LLC) through our firm and get more for your money? More real estate investors than ever are turning to us to form an LLC. If there is a claim or lawsuit relating to real estate owned by a properly formed and managed LLC, only the assets owned by the LLC are generally at risk. The investor's personal assets should not be subject to the claim or lawsuit.

Why Real Estate Investors Form LLC's
Although both an LLC and a corporation can help protect an investor from liability, we find that most investors are choosing an LLC to hold their investment real estate. An LLC can offer more freedom in the management of the property than a corporation can. For example, the LLC operating agreement allows investors to define and limit the rights, powers, and obligations of the manager and members. Also, an LLC may not require some of the formalities of a corporation, such as annual meetings. In addition, LLC owners enjoy pass-through taxation at the federal level. Each member reports their share of the profits or losses on their individual's tax return, and no separate federal tax is assessed on the entity itself.

Transferring Deeds and Mortgages
To transfer a deed to an LLC, the deed is prepared in the LLC's name and filed and recorded in the appropriate office's located in the jurisdiction in which the property is located (usually the county's recorder of deeds office). There are different types of deeds that may be used to transfer the title to the property.

Individual investors who obtain a mortgage for property in their own name and then need to transfer the loan and mortgage to an LLC will need to negotiate the transfer, if possible, with their lender. Whether the lender will agree to allow the LLC to replace the individual investor as the borrower on the loan and mortgage will depend on the particular circumstances presented. There may be costs and tax issues relating to such a real estate transfer as well as changes to existing loans and mortgages, so it is prudent to obtain advice from a real estate attorney.


Transportation LLC
Protecting Your Personal Assets
If you are in the transportation business, forming a Limited Liability Company (LLC) for your transport company can protect your personal assets while you are out on the road. If the LLC is formed and managed correctly, owners can limit their potential liability if there is a claim or lawsuit relating to their business. Only LLC assets should be at risk in a lawsuit or judgment against the business, and the personal assets of the owners should not be subject to the claim.

LLC vs. Insurance?
Many of our customers in the transportation industry purchase and carry business insurance to provide liability and other protection for their company. Whether that insurance provides coverage for specific claims relating to the business will depend on a number of factors. In light of the variety of risks that a business owner may face and the limitations on many types of insurance, we find that many of our customers form an LLC in addition to purchasing business insurance.

 

Which State?
Many of our customers form their LLC in the state where their company conducts the majority of its business. However, in deciding where to form a company, there are many factors to consider -- cost of formation, tax laws, and other laws governing the actions and liabilities of the LLC within each state. We can assist companies that will operate in multiple states with registration requirements in the additional jurisdictions.

 

Interstate Commerce
Depending on its activities, an LLC may need to qualify to do business in states other than the state where it was formed. In addition, a trucking business is usually required to have a process agent in each state in which it is authorized to operate and in states through which it transports cargo.


Why More Business Owners Choose LLC's
A Limited Liability Company (LLC) is often described as the combination of a partnership and a corporation. This is because an LLC combines the tax advantages and management flexibility of a partnership with the liability protection of a corporation.

 

Forming an LLC has become a popular alternative for sole proprietors and partnerships that have thought about forming a corporation in order to protect personal assets. LLC's also avoid "double taxation" because the income of the LLC itself is not taxed at the company level. Instead, taxes on profits and deductions of losses are computed at the individual level on the personal tax return of each LLC member (owner).

Note: LLC owners can elect for the IRS to tax the LLC as a sole proprietorship, partnership, C Corporation, or S Corporation. Owners make this election through the IRS after the company forms with the state.

 

Advantages of an LLC
Limited Liability. Like the shareholders of a corporation, the owners (called 'members') of an LLC have limited liability for business debts. If the LLC is properly structured and managed, each owner's personal assets will be protected from lawsuits and judgments against the business, so each owner's liability is limited to the amount each has invested in the company.


Pass-Through Taxation. If an LLC has only one owner, the Internal Revenue Service will automatically treat the LLC as a sole proprietor. Similarly, an LLC with multiple owners will, by default, be taxed as a partnership. Owners report their share of the profits and losses of the LLC on their personal tax returns, and no separate tax is assessed on the company itself. Note: If you want your LLC to be treated as a corporation that has to file its own corporate tax return, we can tell you how to file papers with the IRS to make it happen.


Citizenship. All owners of a Subchapter S Corporation ('S Corp') are required to be citizens or permanent residents of the United States. There is no such requirement for a general, or 'C,' corporation or for an LLC.
Management Flexibility. LLC's have much more management flexibility than corporations. Also, an LLC may be managed either directly by its owners or by a manager who may be one of the members or may be hired to run the business. Although an S corporation is limited to 100 owners, an LLC may have an unlimited number of owners.


Simple Recordkeeping. Unlike corporations, LLC's are not required to hold an annual meeting and draft meeting minutes. Note, however, that an LLC does need an operating agreement that will specify how and by whom the company will be managed, each owner's name, the amount of ownership interest held by each owner, and many other items. We can assist customers in writing up their operating agreements.


Deductible Expenses. Similar to a corporation, normal business expenses like an owner's salary may be deducted from the profits of an LLC before the LLC's income is allocated to its owners for tax purposes.


Flexible Profit & Loss Allocations. Unlike a corporation, an LLC is not required to allocate profits and losses in proportion to ownership interest ("member interest'). This means that the owners of an LLC can agree to allocate the company's profits and losses among themselves however they see fit and not necessarily based on the percentage of the company each owner controls.


Nationally Recognized. The LLC is now a recognized business structure in all 50 states and the District of Columbia
 

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