or, in addition to the exercise of his rights and powers as a limited partner, he participates in the control of the business. However, if the limited partner participates in the control of the business, he is liable only to persons who transact business with the limited partnership reasonably believing, based upon the limited partner’s conduct, that he is a general partner.”
For more on this statute see NRS 88.430.
Nevertheless, where a limited partner acts as a general he or she may be personally liable to creditors. If a limited negotiates contracts or represents the LP in an official capacity they may be seen as acting as a general partner. The key to avoiding such a fate is to not tempt it. If you are a limited partner, do not act as a general partner.
What LP/LLC decisions require unanimous agreement?
As previously mentioned, approval of the Limited Partnership/Operating Agreement requires unanimous consent in many states. The better practice is to have each partner/member sign the agreement, thereby agreeing to be bound by its terms. Some states require that amending the agreements also require a unanimous vote. Again, it is good practice to have each partner/member sign any amended agreement. Other decisions, by prior agreement, may be required to have a unanimous vote.
Is there any set standard for how much should or can be paid in management fees to a general partner/manager?
There is no set standard for management compensation. Please note that the federal government wants to see a reasonable salary being paid whenever possible so that payroll taxes may be assessed in order to forestall the coming bankruptcy of the Social Security System. Factors to be considered in arriving at a reasonable amount will include the gross revenue of the LP/LLC, the level of management services rendered and comparable industry standards for compensation. A good accountant can help you to arrive at the right number, or you can visit www.salary.com.
All right, I told you it was coming. I know just the thought of taxes gets the blood boiling for some of you. And for the rest of you, the time and trouble it takes just to compile the darn paperwork constitutes one of life’s major annoyances.
But we’ll get through it quickly and efficiently. You’ll receive enough information to understand the landscape and, hopefully, be able to sit down with your accountant and map out your strategy. We’ll briefly review certain LP and LLC, as well as Corporation, Sole Proprietorship and General Partnership, tax information to help you make informed decisions as to which entity is right for you.
Sole Proprietors and Single-Member LLCs
For Sole Proprietorships and single-member (one person) LLCs the tax reporting requirements are very basic. You do not have to prepare or file any additional tax returns. You simply attach a Schedule C, Profit or Loss from a Business (or other schedule, if applicable), to your Form 1040 individual return. On the Schedule C you will detail your profits or losses from your Sole Proprietorship or single-member LLC.
In addition, Sole Proprietor and single-members of an LLC will file a Schedule SE, Self-Employment Tax with their Form 1040. On this schedule you will calculate the amount of self-employment tax (Social Security and Medicare) owed. Currently, the self-employment tax is 12.4 percent for Social Security on earnings up to a statutory maximum of $127,200 as of this writing, and 2.9 percent for Medicare. You may deduct half of the self-employment tax from your income before you pay your personal income tax. All monies flowing through your Sole Proprietorship or single-member LLC will be subject to self-employment tax. There is a difference, however, in how the two entities file their Self Employment Tax Schedule. With the Sole Proprietorship you will use your Social Security Number to file. With a Single Member LLC you will obtain a separate tax identification number and use it for all filings.
Although more fully discussed below, it should be noted here that limited partners, S corporation shareholders and members without active participation in an LLC do not have to pay self-employment taxes on allocated profits. This can be a useful planning strategy.
General Partnerships, Limited Partnerships and Multi-Member LLCs
Конец ознакомительного фрагмента.
Текст предоставлен ООО «ЛитРес».
Прочитайте эту книгу целиком, купив полную легальную версию на ЛитРес.
Безопасно оплатить книгу можно банковской картой Visa, MasterCard, Maestro, со счета мобильного телефона, с платежного терминала, в салоне МТС или Связной, через PayPal, WebMoney, Яндекс.Деньги, QIWI Кошелек, бонусными картами или другим удобным Вам способом.
