Confused...LLC or Partnership

Discussion in 'Business Operations' started by Jmill88, Nov 29, 2008.

  1. Jmill88

    Jmill88 LawnSite Member
    Posts: 129

    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.
     
  2. NEW CITY LAWN CARE LLC

    NEW CITY LAWN CARE LLC LawnSite Bronze Member
    Posts: 1,268

    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.

    http://www.irs.gov/pub/irs-pdf/fss4.pdf?portlet=3

    They explain this on the form instructions.

    http://www.irs.gov/pub/irs-pdf/f8832.pdf
     
    Last edited: Nov 29, 2008
  3. JDUtah

    JDUtah LawnSite Silver Member
    from UT
    Posts: 2,636

    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.
     
  4. Jmill88

    Jmill88 LawnSite Member
    Posts: 129

    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
     
  5. nnj18

    nnj18 LawnSite Silver Member
    Posts: 2,860

    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.
     
  6. Fvstringpicker

    Fvstringpicker LawnSite Fanatic
    Posts: 7,592

    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.
     

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