This letter highlights certain issues relating to the operation of your limited liability company (LLC) that are important in realizing the limited personal liability and tax benefits of doing business in the form of an LLC.
1. BENEFITS OF LLC FORM
As we discussed when you formed your LLC, doing business in the form of an LLC provides limited liability for all owners (“members”) and permits the LLC flexibility in its taxation strategy. These are significant benefits as compared with other forms of structuring a business entity. However, to gain that limited liability protection or experience the advantages of some taxation strategies, the LLC must be treated as a separate entity from its members and be operated in accordance with its operating agreement and/or the governing statutes.
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