Advantages and Disadvantages of Michigan LLC
Advantages Disadvantages Michigan LLC
Michigan LLC
Advantages and Disadvantages Michigan LLC - An Michigan LLC offers business entrepreneurs the form of corporate organization that provides perhaps the most flexibility to you. An LLC formation, like the alternative corporate forms of organization like a limited partnership or a Subchapter S Corporation, are generally prime candidates for a business just starting. The state of Michigan gives public support to an Michigan LLC.Should I form a Michigan LLC?
Advantages Disadvantages Michigan LLC
Advantages of LLC
- Limited Liability: Owners of a LLC have the limited liability protection of a corporation.
- Flexible Profit Distribution: Limited liability companies can select varying forms of distribution of profits. Unlike a common partnership where the split is 50-50, LLC have much more flexibility.
- No Minutes: Corporations are required to keep formal minutes, have meetings, and record resolutions. The LLC business structure requires no corporate minutes or resolutions and is easier to operate.
- Flow Through Taxation: All your business losses, profits, and expenses flow through the company to the individual members. You avoid the double taxation of paying corporate tax and individual tax. Usually, this will be a tax advantage, but circumstances can favor a corporate tax structure.
Advantages Disadvantages Michigan LLC
Disadvantages of LLC
- Limited Life: Corporations can live forever, whereas a LLC is dissolved when a member dies or undergoes bankruptcy.
- Going Public: Business owners with plans to take their company public, or issuing employee shares in the future, may be best served by choosing a corporate business structure.
- Added Complexity: Running a sole-proprietorship or partnership will have less paperwork and complexity. A LLC may federally be classified as a sole-proprietorship, partnership, or corporation for tax purposes. Classification can be selected or a default may apply.
By Michigan and other state law in order to proceed with forming a llc, you need to prepare a written abstract detailing your llc purpose, the names of your initial Michigan LLC members, the name and address of your Michigan registered agent, the details of which will be introduced into the body of your LLC operating agreement and related Michigan LLC formation documents assembled for application to the state of Michigan.
Advantages Disadvantages Michigan LLC
Michigan's 2008 Business Tax Climate Ranks 29th
Michigan ranks 29th in the nation's State Business Tax Climate Index. The Index compares the states in five areas of taxation that impact business: corporate taxes; individual income taxes; sales taxes; unemployment insurance taxes; and taxes on property, including residential and commercial property. Neighboring states ranked as follows: Indiana (12th), Ohio (46th), and Wisconsin (39th).Michigan's Individual Income Tax System
Michigan's personal income tax system consists of a simple 4.35% tax on an individual's federal adjusted gross income (with some modifications). Among states levying individual income taxes, Michigan's flat tax rate is 40th highest. Michigan's 2005 individual income tax collections were $650 per person, which ranked 32nd highest nationally.Michigan's Corporate Income Tax System
Michigan levies a Single Business Tax (SBT), which is a modified value-added tax (VAT). The rate is 4.95% and there is an additional modified gross receipts tax at a rate of .8%. In 2006, state-level corporate tax collections (excluding local taxes) were $186.83 per capita, ranking it 14th highest nationally.Home | Advantages Disadvantages Michigan LLC | Site-Map
