Limited Liability Companies For Dummies ()

Title Page
Copyright Page
Table of Contents
Introduction
	About This Book
	Foolish Assumptions
	Icons Used in This Book
	Beyond the Book
	Where to Go from Here
Part 1 The ABCs of LLCs
	Chapter 1 What Is an LLC, Really?
		Understanding How LLCs Work
			Owners: You gotta have ’em
			Contributions: Where the money comes from
			Allocations and distributions: Getting what you’re due
			Management: Some folks are just better at it
		Creating Your Own LLC: Your First Step Toward Success
			Educating yourself
			Divvying up the ownership
			Deciding who manages
			Choosing your registered agent
			Bringing your LLC into existence
		Operating Your LLC
			Creating your operating agreement
			Keeping books and records
			Paying taxes
	Chapter 2 LLCs: Handier Than Duct Tape!
		Understanding Why LLCs Are Awesome
			Protecting your personal assets
			Taking charge of charging order protection
				How charging orders work
				Economic rights versus other rights
			Enjoying the flexibility of management and ownership rules
				No ownership restrictions
				No management restrictions
			Choosing your own tax status
				Making your selection
			Distributing profits at your whim
		Taking a Look at a Few Wrinkles
			Membership can be a bit tricky
			Rules governing LLCs vary among states
		Discovering the LLC’s Many Variations
			The Professional LLC
				Simply wearing a suit doesn’t make you a professional
				Different liability protection
				Restrictions on ownership
				Restrictions on business activities
				Forming a professional LLC
			The Series LLC
				Segregating your assets in a Series LLC
				When a Series LLC might work for you
				Forming a Series LLC
				Maintaining a Series LLC
				Series LLC Taxation
			The family LLC
			The Benefit LLC
			The single-member LLC
	Chapter 3 Determining Whether an LLC Is Right for You
		Knowing Your Options: Other Business Structures
			Going it alone: Sole proprietorships
				Being a sole proprietorship
				Shouldering full liability: The buck stops with you
				Exploring some more disadvantages
				Losing LLC benefits with disregarded entity taxation
			Adding a partner: General partnerships
				Doubling the trouble by doubling the partners
				Finding out other disadvantages
				Filing taxes with partnership taxation
			Throwing in a little legal protection: Limited partnerships
			Meeting the black sheep of the partnership family: LLPs and LLLPs
				Limited liability partnership (LLP)
				Limited liability limited partnership (LLLP)
			Separating yourself from your business: Corporations
				Creating a legal “person”
				Dealing with the blow of double taxation
			Easing the tax burden: S corporations
				Obtaining pass-through taxation, corporation style
				Complicating matters with IRS restrictions
		Getting Personal: Using an LLC to Achieve Your Specific Goals
			You’re running a small business
				Relying on insurance — to a point
				Taking your business seriously so that others will too
				Combining all the perks in one entity: LLCs
			You want to work for yourself
			You’re looking to raise venture capital
				Forming your business as a corporation to attract investors
				Knowing when an LLC will work
			You want to maximize your real estate investments
				Knowing when corps can kill
				Protecting real estate with LLCs
			You’re looking to keep things in the family
			You need to protect what you’ve earned
			You’re enrolling others in a project
Part 2 Your First Steps: Forming Your LLC
	Chapter 4 Making a Few Key Decisions
		Stepping into the Driver’s Seat: Making Essential Decisions Before Forming Your LLC
			Choosing the initial members
			Deciding how you want your company to be managed
				When the members manage
				When separate managers manage
		Naming Your LLC
			Following naming law
		Determining the Availability of a Name
			Checking names in your state
			Conducting a trademark search
			Reserving your name in your state
			Getting the name you want with a DBA
			Getting a trademark for your name
				Knowing what constitutes a good trademark
				Completing Your Identity with a Logo
				Registering your trademark
		Changing Your Name
		Choosing the Best State for Your LLC
			Your State or Not Your State; That Is the Question
				When “easy” wins out
				When you are operating in multiple states. . .
				When you are stuck with pass-through taxation
		Looking for LLCs Out of State
			Exploring Tax and Privacy Havens
				Wyoming: The birthplace of LLCs
				Delaware: The heavy hitter with the chancery court
				South Dakota: Serious About Attracting Local Business
				Nevada: Still Worth a Mention
				Other Up-and-Coming States
			A Few Caveats. . .
		Working with a State-Required Registered Agent
			Why you need a registered agent
			What your agent should do for you
			How to find an agent
			Evaluating agents
	Chapter 5 Creating and Filing Your Articles of Organization
		Preparing Your Articles
			Meeting your state’s requirements
				Provisions that your articles must have
				The antiquated duration provision
				Extra provisions you may want to include
				Provisions for professional LLCs
			Putting it all together
			Choosing who signs
		Filing Your Articles
			Dotting your i’s and crossing your t’s
			Sending it off
			Dealing with a rejected filing
		Considering Formation Companies
	Chapter 6 Converting Your Current Business into an LLC
		Considering Conversion to an LLC
		Navigating the Tax Implications
			Converting from a sole proprietorship
			Converting from a general or limited partnership
				The big nontaxable event
				The usual partnership tax trap
			Converting from a corporation
				Understanding the tax implications
				Finding Ways to Ease the (Tax) Burden
				Converting smoothly with a merger
				Keeping the corporation
		Executing the Conversion
			Introducing the statutory conversion and statutory merger
			Knowing what your state requires
				Documenting approval for the conversion
				Filing the conversion
				If you’re currently operating as a sole proprietor or general partner
		Tying Up Loose Ends After the Conversion
			Transferring your assets
Part 3 Structuring Your LLC to Work For You
	Chapter 7 Tell Uncle Sam How It Is! Choosing How You Want to Be Taxed
		Getting to Know the Tax Types
			Partnership taxation
				Understanding allocations and distributions
				Getting creative with flexible allocations and distributions
				Deducting LLC losses from your other income
				Avoiding self-employment taxes
			Disregarded entity taxation
			Corporation taxation
				Knowing when to choose corporation taxation
				Seeing how corporation taxation can be a terrible idea
			S corporation taxation
				Reducing your taxes
				Dealing with the restrictions
		Notifying the IRS of Your Election
			Applying for your tax identification number
			Elect Corporate Tax Status with Form 8832
	Chapter 8 Make It Official! Getting Started on Your Operating Agreement
		What Is an Operating Agreement?
			What the operating agreement governs
				Creating a clear-cut ownership structure
				Assigning manager titles and duties
			Why you need an operating agreement
		Establishing Your Framework
			Achieving A+ form and structure
			Building your outline
		Drafting Basic Provisions
			Laying out organizational matters
				Formation and Qualification
				Name
				Term
				Purpose of the Company
			Giving specifics on company records and reporting
				Books and Records
				Financial Records and Reporting
			Getting the boilerplate provisions out of the way
				Liability of Members
				Indemnification of Members and Managers
				Dispute resolution
			Addressing the other stuff
	Chapter 9 Structuring Your Partnership
		Understanding the Terminology: Members, Interests, and Certificates
		Locating and Recruiting Key Partners
			Finding the yin to your yang
			Easy, Tiger! Don’t let excitement cloud your judgment
			Getting the good ones on board
		Issuing the Membership
			Naming the initial members and their contributions
			Understanding some complexities of member contributions
			Determining profit and loss distributions
				Allocations of profits and losses
				Distributions
			Establishing membership classes
			Deciding on how the members decide
				Voting requirements
				Voting
		Making Folks Earn Their Share: Membership Vesting
			Deciding on a fair vesting schedule
			Understanding membership cliffs
			Avoiding common tax pitfalls
		Setting Up a Single-Member LLC
			Keeping your SLLC’s liability protection
			Creating an operating agreement for an SLLC
		Setting Up Rules for Managers
			Outlining the basics
			Electing the managers
			Delegation of powers
			Compensation
	Chapter 10 Using Your LLC to Attract Investors
		Structuring Your LLC to Attract Investors
		Appeasing the SEC with an LLC
			Seeing how the laws apply to you
			Exploring securities registration exemptions
				Rule 504 exemption
				Rule 505 exemption
				Rule 506 exemption
				Intrastate exemption
				Regulation A exemption
				Regulation Crowdfunding
		Flying through State Securities Laws (Blue Sky Laws)
	Chapter 11 Membership Moves: Mastering LLC Transfers
		Investigating Intricacies of LLC Membership Interests
			Determining the value of the membership interest
			Transferring membership
			Using transfer restrictions to your advantage
		Preparing Now For an Easy Transition Later
			Parting on peaceful terms
			Removing a member or dealing with divorce
			Dealing with the death of a member
			Creating individual buy-sell agreements
		Executing the Transition
			Making room for new members
			Giving old and new members their fair share
		Wrapping Up the Operating Agreement
			Signing and Ratifying
			Sharing the copies and storing the original
			Amending the operating agreement
Part 4 Running Your Brand-New LLC
	Chapter 12 Maintaining Your Records (and Sanity)
		Filing Your Initial Report
			Getting to know your state requirements
			Keeping your company current
		Paying to Play: Business Licenses
			Acquiring state, city, and possibly county business licenses
			Applying for a sales and use tax permit
			Following special licensing requirements
				State-issued licenses
				Locally issued permits
				Federally issued licenses
		Meeting Other Pertinent Requirements
			Federal tax identification number
			Workers’ compensation insurance
		(Record) Keeping Your Liability Protection
			Documenting your decisions with resolutions
			Creating a company kit
			Creating and maintaining a membership roll
			Tracking tax filings and financial information
	Chapter 13 Making Cents of Taxes
		Reviewing the Tax Types
			Disregarded entity taxation
			Partnership taxation
			Corporation taxation
			S corporation taxation
		Filing Your Federal Returns
			Dishing it out with “disregarded entity” status
			Ponying-up with partnership taxation
				Preparing Form 1065
				Distributing K-1s to the members
				Paying the actual taxes
			Coughing up cash with corporation tax status
			Shelling it out with s-corporation tax status
		Avoiding LLC Tax Traps
			Transferring assets into your LLC
			Dealing with phantom income
			Minimizing self-employment taxes
				Becoming a silent partner
				Choosing to be taxed as an S corporation
	Chapter 14 Expanding Your Empire: Going National!
		Registering Your LLC in Multiple States
			Defining “doing business”
			Foreign filing to do business in multiple states
		Maintaining Your Multi-State LLC
			Working with your Registered Agent to track your filings
			Submitting initial reports
			Obtaining business licenses
			Paying taxes
			Withdrawing from a state
			Changing your home state
	Chapter 15 Dissolutions: Every Beginning Has an End
		Getting Clear on the Context
		It’s Melting! Examining the Reasons Your LLC May Dissolve
			Voluntary dissolutions: Even the mighty fall
			Administrative dissolution: The state giveth and the state taketh away
			Judicial dissolutions: When the gavel strikes
				Action by the attorney general
				Action by one or more members
				Action by an unsatisfied creditor
			Tax terminations: ’Cause the IRS says so
			Fictional dissolution: A bureaucratic hassle
		Considering the Future Before Calling It Quits
			Keeping your LLC on life support
			All in favor? Taking the vote
			Planning for the future
		Undergoing the Dissolution Process
			Settling your debts: Paying creditors
				Dealing with known claims
				Accepting or rejecting claims
				Dealing with unknown claims
			Giving each their due: Paying members
			Wrapping up the government affairs
			Making it official: Filing the dissolution
			Dealing with the tax consequences
			Following the dissolution checklist
Part 5 LLCs on Steroids: Advanced Strategies
	Chapter 16 Using LLCs to Cover Your Ass(ets)
		Knowing the Dangers: What Can Happen without LLC Protection
			Lawyers and creditors come calling
			The IRS stakes a claim
			Liens are lurking
		Getting the Best Asset Protection with LLCs
			Setting up a Fort Knox for your personal assets
			Taking charge of charging order protection
				Seeing how corporations leave you vulnerable
			Remembering that even charging order protection comes with rules
				You must be a true partnership
				Membership can’t be freely transferrable
				Your LLC must be manager-managed
				Your records must be in order
		Exploring Strategies for Increased Security
			Electing a nominee to protect yourself with privacy
			Setting up multiple LLCs: The more, the merrier!
			Following the dual-entity strategy
				An example of how dual entities work
				The tax advantages
	Chapter 17 Protecting Real Estate with LLCs
		Comparing LLCs to Other Possible Real Estate Entities
			Holding real estate in corporations: a tax nightmare
			When an S Corporation might work
			Falling short with land trusts
				Understanding trust protection
				Assessing the pluses and minuses of land trusts
		Looking at LLC Property Logistics
			Deciding which state to form in
			Getting lenders to loan to an LLC
			Transferring the title
Part 6 The Part of Tens
	Chapter 18 Ten Good Reasons to Form an LLC
		To Customize Your Small Business
		To Protect Real Estate Assets
		To Shield Intellectual Property
		To Raise Seed Capital for Your Business
		To Plan Your Estate
		To Do a Short-Term Project
		To Segregate Assets
		To Minimize Your Tax Burden
		To Change the Profit Distributions
		To Protect Your Personal Assets
	Chapter 19 Ten Ways to Keep Your Liability Protection Intact
		File the LLC Properly
		Find a Partner
		Create an Operating Agreement
		Capitalize the Company
		File Your Annual Reports
		Hold Member Meetings Regularly
		Obtain Your Licenses and Permits
		Avoid Commingling Funds and Assets
		Sign Your Documents Correctly
		Give Up Some Control
Glossary
Index
EULA