Scott E. Friedman - How to profit by forming your own limited liability company
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How to profit by forming your own limited liability company
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Written for entrepreneurs, professional partnerships, and small business owners, this book answers the key questions about this hot opportunity for structuring a business. Limited liability companies offer business owners corporate benefits without corporate taxation. Author Scott Friedman explains in plain English how this formation is suitable for virtually any business.
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How to Profit by Forming Your Own Limited Liability Company
Scott E. Friedman
Upstart Publishing Specializing in Small Business Publishing a division of Dearborn Publishing Group, inc.
Page ii
Dedication This book is dedicated to my wife, Lisa, and my children, Samantha, Eliza, Julia and Madeline; my parents, Iris and Irwin Friedman; and my parents-in-law, Sylvia and Irwin Pastor.
This publication is designed to provide accurate and authoritative information in regard to the subject matter covered. It is sold with the understanding that the publisher is not engaged in rendering legal, accounting or other professional service. If legal advice or other expert assistance is required, the services of a competent professional person should be sought.
Executive Editor: Bobbye Middendorf Managing Editor: Jack Kiburz Associate Project Editor: Stephanie C. Schmidt Interior Design: Lucy Jenkins Cover Design: The Publishing Services Group
1996 by Scott E. Friedman
Published by Upstart Publishing Company, Inc., a division of Dearborn Publishing Group, Inc.
All rights reserved. The text of this publication, or any part thereof, may not be reproduced in any manner whatsoever without written permission from the publisher.
Printed in the United States of America
99 00 01 02 03 04 10 9 8 7 6 5 4 3
Library of Congress Cataloging-in-Publication Data
Priedman, Scott E., 1958 How to profit by forming your own limited liability company / by Scott E. Friedman. p. cm. Includes index. ISBN 0-936894-93-8 1. Private companiesUnited StatesPopular works. 2. Private companiesTaxationUnited StatesPopular works. 3. Tax planning United StatesPopular works. I. Title. KF1380.Z9F75 1995 346.73'0668dc20 95-18580 [347.306668] CIP
Page iii
Contents
Preface
v
Chapter 1 Overcoming the "Choice of Entity" Dilemma
1
Chapter 2 Bringing Your Business into the Future: An Introduction to Limited Liability Companies
15
Chapter 3 How to Form Your Limited Liability Company
39
Chapter 4 Managing Your LLC Profitably
61
Chapter 5 Financing Your LLC
79
Chapter 6 Creative Uses of LLCs
91
Chapter 7 Using Your LLC to Plan Your Estate
101
Chapter 8 Beneficial Tax Treatment of LLCs
115
Chapter 9 Converting Your Existing Business to an LLC
133
Chapter 10 Dissolving Your LLC
139
Chapter 11 Is a Limited Liability Partnership for You?
145
Chapter 12 The Dynamic LLC Opportunity State by State
151
Appendix A: Sample Forms for Creating and Operating an LLC
159
Apendix B: Comparison of Legal Entity Formations for Your Business
179
Index
181
Page v
Preface
It is not unusual for changes to take place in the law. Every day, legislation is enacted and cases that serve as precedents are decided by our judiciary. These changes may range from minor to significant. A very few changes are so important that they can best be described as "revolutionary." Because revolutionary changes are so rare, it is exciting when they do occur and a privilege to be able to help spread the news.
I believe the subject of this booklimited liability companies or, as they are often called, LLCsis a revolutionary subject, one that promises to reshape the business landscape throughout the United States. Let me offer a brief background to help place this exciting new subject in perspective.
Any entrepreneur who is either thinking about starting a business or is already in business has to decide what the "form" of the business should be or whether to change to another form. Historically, the choice has largely been between sole proprietorships, partnerships and corporations.
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