Читать книгу Ultimate LLC Compliance Guide - Michael Spadaccini - Страница 7

While LLCs are essentially creations of state legislatures, corporations are truly ancient—and today’s corporate law still carries some unwanted baggage. The modern American corporation has antecedents that date to Roman times, inherited by us through English law. The basic principles of American corporate law have not changed significantly in centuries. Probably the single greatest disadvantage of the corporate form is the burdensome range of formalities that corporate managers must observe. A modern corporation’s heavy administrative burden is a remnant of the more traditional and formal legal system under which corporate law was cultivated.

▼ Expert Tip

LLCs are the favorite choice for small local business entities with one to three owners who do not plan to grow their business significantly and do not expect to raise significant amounts of capital. As the number of owners grows, the corporation becomes a more attractive choice as a business form.

The LLC changed all that. The LLC offers the liability protection benefits of the corporation without the corporation’s burdensome formalities. It is this simplicity that has made the LLC an instantly popular business form for smaller companies.

Another attractive feature of LLCs is their flexibility. An LLC can elect to be taxed either as a partnership or as a corporation. An LLC can be managed like a partnership (a member-managed LLC) or like a corporation (a manager-managed LLC). An LLC can create a board of directors and have a president and officers just like a corporation. An LLC can choose to have periodic meetings of its members or choose to ignore such formalities altogether.