There are four characteristics that distinguish an entity taxed as a partnership (flow through income and loss to the owner) and a corporation (the corporate entity pays tax and then the owner pays tax on distributions received - called \"double taxation\"). Centralized management is one of these four characteristics. Where centralized management exists, it is a corporate (not partnership) characteristic. If all members of the LLC are permitted to manage the LLC, there is no centralized management. Where only one member is named the manager, centralized management exists. The decision in other circumstances can vary from less clear to uncertain. Now that the IRS has passed \"check the box\" regulations, which will generally permit a partnership or LLC to simply elect to be taxed as a partnership, these technical distinctions are less important. This is important. Consult with your tax advisor.
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