View Full Version : Confused...LLC or Partnership
11-29-2008, 07:19 PM
I filed an LLC in Missouri and included my wife and myself as members. I then applied for a Federal Tax Id number and they classified this as a partnership. Can anyone tell me what is correct? I definately don't want to be a partnership, because the way I understand it I can be held liable. I thought that an LLC can have more than one member.
NEW CITY LAWN CARE LLC
11-29-2008, 07:24 PM
The IRS classifies an LLC as a Domestic Parnership, but, an LLC can have as many members as you'd like, which is why they consider an LLC a Partnership, otherwise you'd simply be a Sole Proprietorship, but You can have a single member LLC as well, which is probably what you may want to do, change the paperwork as you as the single member LLC, even on your tax ID paperwork, a single member to the irs as an LLC would still be a domestic parntership, just fill out the form SS-4 accordingly.
They explain this on the form instructions.
11-29-2008, 07:31 PM
LLC means you have an added legal protective wall so to speak. When you file your LLC, you check the box how you want to be taxed... as a sole proprietor, a partnership, an S-Corp or a C-Corp...
Sounds like the general partnership box was checked when you created your LLC... you still have the legal protection of the LLC, you are just taxed like a general partnership.. but the question is, is that how you want to be taxed?
That's the best of my limited knowledge. Be sure you talk to an accountant.
11-29-2008, 08:34 PM
After doing some research, I am pretty sure I set up the LLC correctly. As far as I know, you can have as many members in an LLC as you want. You just have to file a 1065 to do joint taxes. Anyone else have an LLC with multiple members that can shed some light on this. Thanks
11-30-2008, 02:21 PM
you probably should be a LLP = limited liability partnership; atleast thats what I've been advised on being. I would talk to a lawyer and accountant about it.
11-30-2008, 03:06 PM
Technically, a LLC is a hybrid form of business having both attributes of partnerships and corporations. Each owner of a LLC has limited liability like the stockholders of corporations but they are generally treated as a partnership for tax purposes, hence the Fed ID being for a partnership. A LLC may elect to be taxed as a corporation but few do. A couple of the disadvantages of a LLC are the limited body of court cases dealing with this entity (thus, you could have the honor of one day being a precedent in someones else's case) and state laws are not uniform, causing confusion if you operate in more than one state.
vBulletin® v3.8.6, Copyright ©2000-2015, Jelsoft Enterprises Ltd.