Limited Liability Companies
In 1997 Arkansas laws were changed to permit two new business entities. Businesses and firms throughout the country are beginning to choose to be Family Limited Partnerships or Limited Liability Companies because they allow the businesses to operate with limited liability and to have "pass-through" income tax advantages. These business forms are helpful to those businesses that are taking a long-term view towards the needs of the business as it passes to the next generation.
Advantages of FLIPS And LLCs
• Protection from liability at a time when insurance coverage is becoming more limited. This may involve adding, for example, an LLC to your current corporation.
• Less of a tax bump when the business is ended or when the business is passed down to the next generation.
• Your children can increase their participation in management over time without losing their protection from liability.
• The benefits of ownership can be passed down to the next generation without the parents losing control of day-to-day operations.
• The business assets are protected from, for example, the creditors of the spouse of a child.
• The amount and origin of income can be kept private within the family and with respect to competitors.
• The business structure helps your attorney plan to minimize the impacts on the business of estate taxes and probate delays and in this way help the business to keep running for the benefit of your family.
These new entities are available now to you regardless of your current structure-whether you are a sole proprietorship, a corporation, or a general or limited partnership.
Susan Walker Allen, Attorney at Law is recommending these new entity forms to many of her clients with businesses. If you are interested in an assessment of the benefits you could enjoy from a new entity form,
please call for an appointment.