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Limited Liability Companies Although a Puerto Rico LLC is automatically treated as a corporation for US federal income tax purposes, it may elect to be treated as a partnership or disregarded entity, as applicable. This election is accomplished through the filing of Form 8832 with the IRS.
By default, Puerto Rico LLCs are taxed as corporations. However, both single-member LLCs and multi-member LLCs in Puerto Rico can opt to be taxed as partnerships instead.
Puerto Rico residents generally do not pay federal income taxes, but they do pay taxes to the Puerto Rico government. And Puerto Rico keeps those taxes low for certain businesses and individuals. Under the Act 60 Export Services Tax Incentive, a qualified business enjoys a corporate tax rate of only 4%.
Employers and non-employers in Puerto Rico file this form to obtain an Employer Identification Number (EIN).
Ingly if an LLC is organized under the laws of Puerto Rico it is taxed as a domestic corporation and if organized under the laws of any other country, including the United States, it is taxed as a foreign corporation. A Puerto Rico LLC is a foreign eligible entity for U.S. federal income taxes.
A Limited Liability Company, or LLC for short, is a business structure that combines the benefits of both partnerships and corporations. It's considered a separate entity from its owners, also known as members. This means that the LLC can take on debt and liability without affecting the personal assets of its members.
What is the LLC Default Tax Classification? By default, a single-member LLC is taxed as an entity disregarded as separate from its owner (a sole proprietorship), while multiple-owner companies are taxed as a partnership by default.
A Puerto Rico DBA, also referred to as a trade name, is an alternative name that your business can use in place of its legal business name. All types of businesses are able to get a DBA, including Puerto Rico sole proprietors, general partnerships, LLCs, and corporations. A DBA is just like your legal business name.