You can be a one member LLC. The biggest disadvantage is you lose the “charging order” protection if you are sued personally, but your personal assets are still protected if your business is sued. So don’t panic and rush out and make your disliked son-in-law a member of your LLC just yet. Remember, anybody can be a member of an LLC, including another entity, so you might want to look at forming another LLC or Corporation to become the second member.
The following table provides a look at the LLC vs Corporation, and LLC vs S-Corporation. Tax comparisons can be found in the lower portion of the table.
C-CORPORATIONView the Details Incorporate Now
LLCView the Details Incorporate Now
S-CORPORATIONView the Details Incorporate Now
Stock, there may be different classes.
|Membership interests. There may be different classes of membership.||One class of stock. Which may be voting or non-voting.|
|Eligible Owners||No restrictions.||No restrictions.||100 shareholder limit. No non-individual and no non-resident alien shareholders.|
|Management||Managed by director(s) and officer(s).||Two Management Types
- Managed by Manager
- Managed by Members
|Managed by director(s) and officer(s).|
|Allocations of Ownership||None. Dividends must be paid based upon stock ownership.||Permitted if the allocations have substantial economic effect.||None. Income, gain, and loss pass-through to the shareholders based on the percentage of shares owned.|
|Liability Protection||There is limited liability for shareholders, officers and directors.||There is limited liability for members and managers (if applicable)||There is limited liability for shareholders, officers and directors.|
|Duration||Perpetual||Dissolves at the time specified in the Operating Agreement or upon the loss of a member unless other members agree to continue.||Perpetual|
|Transfer of Ownership||Shares freely transferred.||There may be restrictions under certain state laws.||Shares can be transferred only to eligible S-corporation shareholders|
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