I wrote a letter to the author of “Setting Up a Business Structure” in the September 26, 2010 Wall Street Journal Sunday in the Denver Post.
In this time of high unemployment among architects, we don’t need any misinformation about setting up small businesses.
Dear Ms. Needleman,
LLC does not mean “limited liability corporation.” LLC means “limited liability company.” Your referring to LLC as “limited liability corporation” in today’s Wall Street Journal Sunday article is incorrect and could confuse people.
Your article also says that Marc Karell lost his unemployment benefits because of filing his new business as an LLC.
Don’t you think he would have lost those benefits by filing as a C-Corp or S-Corp or any other business that requires filing forms to create a new company? I don’t think it’s the LLC structure itself that is to blame, but the setting up of his new business.
In Colorado, at least, if you set up your new business (with the state) as an LLC, you have to decide (for IRS purposes) whether you will be a corporation (S or C), or a partnership, or a sole proprietorship. You don’t choose from the 5 choices you listed: S-Corp, C-Corp, partnership, sole proprietorship, or LLC. You choose from the first 4. You can also be an LLC in addition to one of the first 4, but you HAVE to be one of the first 4.
This second topic I’ve brought up may vary by state. However, referring to LLC as “limited liability corporation” is a pretty big mistake.
People need sources of information that they can trust. I’m not an attorney or MBA or accountant – I’m just an architect, with a bachelor’s degree. If I know this stuff, someone writing an article about it in the Wall Street Journal should know it better than I do, or should have done all the necessary research to verify its correctness, before going to print.
Liz O’Sullivan, Denver, Colorado