Much like the use of Trusts and our growing fondness on said use, we find more and more uses for LLC’s
Notably the Real Estate (especially commercial) were pioneers in using LLC’s, naturally due to their exposures and inherent risks.
Happily with more and more LLC’s in our office and more questions about them, we pulled a few interesting background information for your perusal… but before we jump into that… two set up warnings…
- Mind the taxes – Be sure to interface with your tax professional when setting these up and make sure you are not accidentally burying yourself under a load of unnecessary filings…
- Mind the holdings – An LLC is designed to give you protection…. but if you put everything in it, you may be diluting the benefit
Attorney and Tax professionals are your go to folks on setting this up correctly…..
Recall the old saying “Measure twice cut once!”
We think if fits well!
Background and LLC Details
From Investopedia
A limited liability company (LLC) is a business structure in the U.S. that protects its owners from personal responsibility for its debts or liabilities. Limited liability companies are hybrid entities that combine the characteristics of a corporation with those of a partnership or sole proprietorship.
What Is Limited Liability?
Limited liability is a type of legal structure for an organization where a corporate loss will not exceed the amount invested in a partnership or limited liability company (LLC). In other words, investors’ and owners’ private assets are not at risk if the company fails.
The limited liability feature is one of the biggest advantages of investing in publicly listed companies. While a shareholder can participate wholly in the growth of a company, their liability is restricted to the amount of the investment in the company, even if it subsequently goes bankrupt and has remaining debt obligations.
Also from the IRS
A Limited Liability Company (LLC) is a business structure allowed by state statute. Each state may use different regulations, you should check with your state if you are interested in starting a Limited Liability Company.
Owners of an LLC are called members. Most states do not restrict ownership, so members may include individuals, corporations, other LLCs and foreign entities. There is no maximum number of members. Most states also permit “single-member” LLCs, those having only one owner.
While it may sound neat to have an LLC, be forewarned if you set one up and do not really need one, you have garnered yourself unneeded work!
Have a Great “LLC Review” Day!
John A. Kvale CFA, CFP
Founder of J.K. Financial, Inc.
A Dallas Texas based fee only
Financial Planning Total Wealth
Management firm.
$treet-¢ents 
Why October can be a Bumpy Month … Halloween? No
Our content in this venue is sometimes informative (we hope), sometimes clarification of headlines, sometimes educational, sometimes humorous and self-deprivation, and in this post more of a diary for our own education and collective remembrance.
Why October can sometimes be spooky for Capital Markets?
Probably the spookiest October that many may only read about is October 1987, but long-term historians will note that while the fourth quarter is generally a good quarter for capital markets (likely not the case this year with a FOMC yielding an interest rate rocket – ok, digressing), October can be rather spooky.
Why?
Year End for Many Mutual Funds – A very large number of mutual funds in the order of North of 20% have their year-end in October. This creates unique pressures across-the-board both on stocks that have done bad and false increases on stocks that maybe have done good as mutual funds close their books down for the year. As a sidenote last month, September garnered over 10%-year end mutual fund companies.
Black Out – With the official start of earning season being early October, publicly traded companies are restricted from purchasing their own stock. As of the most recent reading approximately 30% of exchange volume was estimated to be company buy backs…. Yes, your read that correct…30% of daily volume … Wow! Once the black out commences, by law companies are no longer allowed to purchase their company stock until a certain date after their public filing. The purpose of this is of course to cut back on any perceived manipulation. This absence of a normal one third volume of trading can make for “thinner” markets and spookier.
Confession Time – The Clock has run out – Publicly traded companies, many of which are on a fiscal year (tax year ends 12/31), the final quarter becomes the quarter of confession especially If earnings are skewed much differently than what capital market participants expect. This force is a pseudo-named “Confession”, as the calendar has just run out of rope forcing the final grade for the year in some cases.
Seasonality – As mentioned above, weird things have happened in October, creating a weird feed back loop. This means, that by knowing sometimes things can get spooky in this month, market participants and thereby Capital Markets can get spooked easier!
Mix it all up and we get a witch’s Brew of spooky times in October.
But guess what?
We have let you know in advance, and we are not calling for a Spooky month, but there is a reason this post/memoir/diary is coming out now…. Just after a few spooky huge up days in Capital Markets…
Boo… We have your back!
John A. Kvale CFA, CFP
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Posted in Education, FOMC, Interest Rates, Investing/Financial Planning, Market Comments, Why
Tagged 1987 Crash, October 1987, October Blues, Seasonality, Spooky October