Great round up of why an LLC might not always be the best 1
I still think that an LLC is the best thing since sliced bread. However read up on Roth & Company’s blog on some of the specific reasons why LLC’s might not always be ideal .
These are mainly US centric reasons. But in particular it looks like there are specific problems with California based LLC’s. I am not sure how this would work if only one partner is in California and the rest elsewhere.
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The California LLC problem is entity-specific: the LLC is liable for the tax, not the members. This tax is computed on UNAPPORTIONED LLC gross receipts, and can exceed $10,000. Just a touch of presence in California can mean a $10,000 liability for a fair-sized business.
It can also be contagious; you can find yourself with California nexus, and a franchise tax liability, because you own an interest in an LLC with California nexus.