Page 16 - TCP, LLC - Sustainable Island Prosperity Fund

BENEFITS OF LLC MEMBERSHIP
• The limited liability company (LLC) is a relatively new form of doing business in the United States (in 1988 all 50 states enacted the LLC laws).
• The LLC is a hybrid that combines the characteristics of a corporate structure and a partnership structure. It is a separate entity like a corporation, but it has entitlement to be treated as a partnership for tax purposes and therefore carries with it certain tax benefits for the investors. The owners and investors are called members and can be virtually any entity including individuals (domestic or foreign), corporations, other LLCs, trusts, pension plans, etc. Unlike corporate stocks and shares, members purchase Membership Units. Members who hold the majority of the voting class membership units maintain controlling management of the LLC as specified in the LLC operating agreement.
• The primary advantage of an LLC is limiting the liability of its members. Unless personally guaranteed, members are not personally liable for debts and obligations of the LLC. Additionally, “pass-through” or “flow- through” taxation is available, meaning that (generally speaking) the earnings of an LLC are not subject to double taxation unlike that of a “standard” corporation. However, they are treated like the earnings from partnerships, sole proprietorships and S corporations with an added benefit for all of its members. There is greater flexibility in structuring the LLC than is ordinarily the case with a corporation, including the ability to divide ownership and voting rights in unconventional ways while still enjoying the benefits of “pass-through” taxation.
The Caribbean Project, L.L.C.’s - Sustainable Island Prosperity Fund