How LLCs Distribute Profit to Their Members

LLCs distribute their profits equally to all members, depending on each member’s ownership percentage. So, if you were a 50 percent owner, for example, you would be entitled to receive 50 percent of the net profit (or loss) that the LLC sustained each year.

However, LLCs may, under special arrangement, pay net profits out in other arrangements, as the members may agree. No other business structure can do this – another reason LLCs are such attractive structures to use!

LLCs may not pay salaries to owners unless they have elected C or S Corporation taxation.

There are many variables when you’re structuring a business. That’s why it’s hard to go through a quick-service website. Unless you talk to someone who’s got some knowledge and experience on both the tax and the legal side, it’s hard to know what you don’t know. And that can leave you vulnerable.

Got questions? Contact us! We’re here for you.

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