Five Guys Enterprises: Benefits of the LLC
Five Guys Enterprises, LLC was founded in 1986 by Jerry and Janie Murrell and their four sons in Arlington, VA. Named for the men in the family, the Murrells intended the restaurant to be financial security for their sons who were not interested in pursuing higher education. As such, the Murrell's formed a LLC, a limited liability company for their restaurant. The LLC is of benefit to the company for a number of reasons:
1. Ownership Flexabiity
Flexibility of ownership allowed several advantages to the family. First, Jerry, Janie, and their five sons are all able to hold membership in the LLC. This also makes it easier to bring in investors, corporate partners, or transfer ownership without having to disrupt the daily operations of their restaurants. Finally, when Jerry and Janie decide to retire, they can smoothly pass the company on to their "Five Guys" with out much hassle. In addition, the family has no desire to make Five Guys a publicly traded company, meaning that the company is solely in control of the members of the LLC.
2.) Tax benefits The LLC allows several tax and financial advantages. LLCs are able to choose how they wish to file their taxes. Under a LLC with multiple owners, the owners have the ability to have their company taxed as either a partnership or as a either and S or C corporation. By doing this they are able to avoid paying a separate tax on company earnings, rather the income of the company is treated as income of the individual owners. This allows the company earning to be taxed at the individual owner's tax rates and makes that income subject to the individuals' tax exemptions in addition to the exemptions that are able to be claimed by the company.
3.) Limited Liability
In an LLC all members of the company are entitled to limited liability. What this means, is that for the most part, in the event of company bankruptcy or judgement, the owners of the LLC, as well as their individual assets, are
1. Ownership Flexabiity
Flexibility of ownership allowed several advantages to the family. First, Jerry, Janie, and their five sons are all able to hold membership in the LLC. This also makes it easier to bring in investors, corporate partners, or transfer ownership without having to disrupt the daily operations of their restaurants. Finally, when Jerry and Janie decide to retire, they can smoothly pass the company on to their "Five Guys" with out much hassle. In addition, the family has no desire to make Five Guys a publicly traded company, meaning that the company is solely in control of the members of the LLC.
2.) Tax benefits The LLC allows several tax and financial advantages. LLCs are able to choose how they wish to file their taxes. Under a LLC with multiple owners, the owners have the ability to have their company taxed as either a partnership or as a either and S or C corporation. By doing this they are able to avoid paying a separate tax on company earnings, rather the income of the company is treated as income of the individual owners. This allows the company earning to be taxed at the individual owner's tax rates and makes that income subject to the individuals' tax exemptions in addition to the exemptions that are able to be claimed by the company.
3.) Limited Liability
In an LLC all members of the company are entitled to limited liability. What this means, is that for the most part, in the event of company bankruptcy or judgement, the owners of the LLC, as well as their individual assets, are