Why does an LLC maximize the flexibility of the business with respect to taxation?

When an LLC is formed, the members may opt to have the LLC taxed as a Subchapter C Corporation, a Subchapter S Corporation or a partnership. There are advantages and disadvantages to each option. For the vast majority of small businesses, the right choice will be one of the "pass through" entities, i.e. either an S Corporation or a partnership. This avoids the double taxation that occurs with a C Corporation, i.e. taxation at both the corporate level and the member/shareholder level.

Legal Advice Disclaimer: The information presented on this website serves solely as general guidance and should not be construed as legal advice by MacDonald, Illig, Jones & Britton LLP as a replacement for seeking personalized legal counsel from a qualified attorney. MacDonald, Illig, Jones & Britton LLP does not assume liability for the accuracy or reliability of content hosted on any third-party websites accessible through links provided on this site.