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Jack R.
Jack R., Attorney
Category: Business Law
Satisfied Customers: 6147
Experience:  Significant Company/HR Experience
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I am starting up a LLC. Would I benefit from making a close

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I am starting up a LLC. Would I benefit from making a close friend a small % member and being taxed as a partenership over being taxed as a sole proprietership?

Probably not. When you do the taxes for the LLC the % partnership is used to allocate profit/loss to the members. A small percentage means that only a small part of the profit will be allocated to the partner who would pay his marginal tax rate for the income allocated to him/her. If you are both in the same tax bracket the same amount of tax gets paid.

 

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