How taxes are paid on the income of the founder of an LLC

By creating a limited liability company, its founders will certainly expect to receive a normal and stable income in the future. However, it, like most other payments, is tax deductible.

What income is the founder of the LLC entitled to

A participant in a limited liability company is entitled to expect to receive part of the profit from his activities. This profit is paid by the company in the form of dividends. The frequency and timing of dividend payment are stipulated by the charter of the LLC, as well as internal documents of the enterprise.

Along with participation in the LLC as the owner of corporate rights, the founder (if this is an individual) can be an employee of the company, holding the position of director or performing other labor duties. In this case, the founder’s income also includes wages, bonuses and other payments equal to them.

In addition, the founder on his own behalf may conclude a civil contract with the company. Here the income will be payments made by LLC under this agreement.