Single-Member Limited Liability Company Benefits Wood River, IL

Just like many other states, the Illinois Limited Liability Act (“LLC”) allows there to be single-member LLC’s. There are many scenarios where this is a better option that the unincorporated business model that was usually the only option for this kind of business formation. Many living in Wood River, IL are not aware of the benefits that come with a single-member LLC compared with other business models. Here we want to explain some of the benefits that come with single-member liability companies.

Comparable Benefits

A single-member LLC is recognized as a legal entity by Illinois law. Single-member LLCs do not require there to be an elected Board of Directors or Corporate Officers. Single-member LLCs have a liability shield similar to a corporation. As mentioned before, single-member LLCs are not limited to many of the requirements that corporations require. This also includes things like annual meetings and corporate meetings.

Single-Member LLC’s and the IRS

The IRS treats single-membered LLCs as a “disregarded entity.” Despite this somewhat misleading name, this comes with many benefits in terms of business entity choice and formation. What it means is that single-member LLCs do not pay taxes or file an income return. Single-member LLCs will report profit and loss on the sole member’s own tax returns. If you live in Wood River, IL, you should know that the State of Illinois Department of Revenue does not require a corporate or partnership tax return for any single-member LLCs either.

Single-Member LLC’s and Trusts

The sole member of a single-member LLC can put their ownership in a trust to avoid probate, which will allow a trustee who is chosen by the single member to make the decision to continue the business or wind it down once the original owner has died. This does not require any involvement with probate courts. Usually with sole proprietorship, upon the owner’s death, the probate court proceedings will have to be initiated and supervised in order to wind the business down as well as close any bank accounts, pay off any bills, and do anything else. Single-member LLCs do not have to worry about this process at all. They can also be transferred under Illinois’ Uniform Transfer on Death Act which would also dodge probate.

If you live in Wood River, IL, and have any more questions about Single-Member LLCs, give our team of legal professionals over at Diaz Law Offices a call today!