Limited Liability Company

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The Limited Liability Company ( LLC ; German  company with limited liability ) is a legal form of a company in the USA , which, depending on the state of the United States, may be similar to a corporation or a partnership .


Some states include in this legal form of companies as partners from demanding more shareholders, a written partnership agreement , an indication of the establishment in the local newspaper or corporation .

At the federal level of the United States, the LLC is taxed either as a sole proprietorship, as a partnership, or, upon request, as a corporation . The Social Security and Medicare is considered a shareholder of an LLC as a self-employed person who throughout their profits as income has.

Taxation as a partnership was the intent of the Wyoming Act of March 4, 1977, which incorporated the LLC into United States corporate law. The forerunner of the LLC was the Limited Partnership Association or Partnership Association , introduced in Pennsylvania in 1874 and in Michigan , Ohio and New Jersey in the following years , the primary intention of which is the limitation of liability given .

Several commissions proposed the LLC regarding nationwide uniform legal texts, which some states more or less adopted. One or the other variant was adopted by several states. Hawaii was the last state to allow LLC through a law of June 7, 1996 from April 1, 1997.

Tax treatment in Germany

In Germany resident shareholders of an LLC can be taxed differently. The Federal Fiscal classified with a judgment of 20 August 2008, a letter from the Federal Ministry of Finance from March 2004 as a fundamentally and thus rejected a ruling by the Financial Court Baden-Wuerttemberg .

In this letter dated March 19, 2004, the Ministry explains in detail that a decision must be made on each individual LLC, regardless of its classification in the USA, on the basis of all actual facts, as it may be classified under German tax law.

An LLC can therefore be treated as a partnership by the USA and as a corporation by Germany, as a corporation by the USA and as a partnership by Germany or equally by both sides. On the one hand, for example, the profit of the LLC can be a basis of assessment for income tax and, on the other hand, only profit distributions with US withholding tax . In addition, there are different effects of intergovernmental agreements.

See also

Web links

Individual evidence

  1. ^ A b c Limited Liability Company . US Small Business Administration. Retrieved September 16, 2014.
  2. ^ Limited Liability Company (LLC) . Internal Revenue Service . September 8, 2014. Retrieved October 20, 2014.
  3. a b c d Bertil Weigend: The US-American Limited Liability Company in comparison to German forms of company under consideration of tax aspects (=  Berlin contributions to jurisprudence . Volume 12 ). Weißensee Verlag, Berlin 2004, ISBN 3-89998-029-8 ( excerpt [PDF; 161 kB ; accessed on September 16, 2014] at the same time dissertation , University of Hamburg , 2001).
  4. Limited Liability Company (1995) (1996) . Uniform Law Commission. Retrieved September 16, 2014.
  5. Limited Liability Company (Revised) ( Memento of October 31, 2014 in the Internet Archive )
  6. BFH, judgment of August 20, 2008 - Az. IR 34/08 . openjur . Retrieved September 16, 2014.
  7. Federal Ministry of Finance: Tax classification of the Limited Liability Company founded under the law of the states of the USA (PDF; 127 kB) Wolters Kluwer . Retrieved September 16, 2014.