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Oklahoma LLC
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Advantages of Limited Liability Company
- Limited Liability: Owners of a LLC have the limited liability protection of a corporation.
- Flexible Profit Distribution: Limited liability companies can select varying forms of distribution of profits. Unlike a common partnership where the split is 50-50, LLC have much more flexibility.
- No Minutes: Corporations are required to keep formal minutes, have meetings, and record resolutions. The LLC business structure requires no corporate minutes or resolutions and is easier to operate.
- Flow Through Taxation: All your business losses, profits, and expenses flow through the company to the individual members. You avoid the double taxation of paying corporate tax and individual tax. Usually, this will be a tax advantage, but circumstances can favor a corporate tax structure.
Disadvantages of Limited Liability Company
- Limited Life: Corporations can live forever, whereas a LLC is dissolved when a member dies or undergoes bankruptcy.
- Going Public: Business owners with plans to take their company public, or issuing employee shares in the future, may be best served by choosing a corporate business structure.
- Added Complexity: Running a sole-proprietorship or partnership will have less paperwork and complexity. A LLC may federally be classified as a sole-proprietorship, partnership, or corporation for tax purposes. Classification can be selected or a default may apply.
By Oklahoma and other state law in order to proceed with forming a llc, you need to prepare a written abstract detailing your llc purpose, the names of your initial Oklahoma LLC members, the name and address of your Oklahoma registered agent, the details of which will be introduced into the body of your LLC operating agreement and related Oklahoma LLC formation documents assembled for application to the state of Oklahoma.
Oklahoma’s Business Tax Climate Ranks 14th
Oklahoma ranks 14th in the State Business Tax Climate Index, which measures the impact on business of five major elements of the tax system: the percentage of income taken by all taxes, the individual income tax rates, the corporate income taxes, the sales tax rate, and the complexity of the tax system. Neighboring states ranked as follows: Kansas (32nd), Colorado (8th), New Mexico (40th), Texas (4th), Arkansas (43rd) and Missouri (11th).Oklahoma’s State/Local Tax Burden Below National Average
Consistently over the past 14 years, Oklahoma has had a state/local tax burden that was below the national average. Despite peaking at 9.9% in 2001, the state has consistently kept its figure below the national average. Estimated now at 9.2% of income (ranked 39th nationally), Oklahoma’s state/local tax burden percentage is below the national average of 10.0%.
Oklahoma’s Individual Income Tax System:
Oklahoma’s personal income tax system consists of eight brackets and a top rate of 6.65% kicking in at an income level of $10,000. Oklahoma’s top rate of 6.65% is 18th highest among states levying personal income taxes. Oklahoma's 2002 individual income tax collections were $655 per person (23rd highest nationally). 50-State Table of Individual Income Tax Rates
Oklahoma’s Corporate Income Tax Rate and Collections among the Lowest Nationally
Oklahoma’s corporate tax structure consists of simply a flat tax of 6% on all corporate income. This tax ranks the state 10th lowest among states levying corporate income taxes. In 2001, corporate tax collections reached $48 per capita.
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