What Types of Business Can be Converted to an LLC?
Before going ahead with your plan, it is essential to have a good understanding of the businesses that qualify for conversion into an LLC.3 min read
What types of business can be converted to an LLC? Do you have a business you wish to convert to an LLC? Before going ahead with your plan, it is essential to have a good understanding of the businesses that qualify for conversion into an LLC, the requirements, and the legal and tax implications.
Uniform Limited Liability Company Act
Every state has passed the Uniform Limited Liability Company Act or its local equivalent to allow the creation of limited liability companies. Under these state laws, any legitimate business activity can form an LLC. An LLC is ideal for almost any type of business activity as it offers a high level of flexibility. Forming an LLC requires filing articles of organization with the state government. A business owner enjoys two main benefits by creating an LLC. First, the liability protection an LLC provides is like that of a corporation. Second, tax authorities treat an LLC as a pass-through entity, effectively allowing the LLC owner to avoid double-taxation which owners of a corporation are subject to.