What Is A Limited Liability Corporation?

If a self-publishing writer creates a limited liability corporation through which he can publish his own novel, what are some of the legal layers he has to go through in order to pay himself?

• Would superficial contracts have to be drafted between himself and the corporation, specifying what HIS  percentages are, versus what remains within HIS corporation? An example  of an author who created a publishing company would be William P.  Young, who created Windblown Media, through which he could publish his  novel, The Shack. What other issues exist that might be unique to publishing one's own book through a proxy publishing company?

• Answer:

  I assume when you say Limited Liability Corporation, you really mean Limited Liability Company or LLC. An LLC is not a corporation and offers the flexibility to choose how you wish to have the legal entity taxed. If the author elected to have the LLC taxed as a disregarded entity, then there would be no tax implications as the IRS would look at the LLC as just a tax extension of the individual like any other sole proprietorship. Same answer if he choose to be taxed as a partnership because he wished to share ownership with someone else. Choosing to be taxed as a corporation (either S or C) would add some additional layers of reporting requirements.