All About LLC, the limited liability companyAug 03, 2022
What is an LLC?
LLC means limited liability company, a type of corporate entity. An LLC was created to give small business owners the benefits of corporate protection without having to follow all of the intense corporate rules and regulations, including corporate taxation. An LLC allows its members to declare business profits on their personal tax returns without double taxation, so the IRS will only tax gains once instead of twice with a corporation. Owners of an LLC are called members, and an LLC can have one member or multiple members.
How is an LLC formed?
Creating an LLC is very easy from the beginning. You will need to file Articles of Organization with your Secretary of State or State Division of Corporations. The Articles of Organization include your company’s name, its address, the names of its members, the designation of a statutory agent and address, and sometimes the purpose of the LLC. Registration is typically a minimal fee.
Once your Articles of Organization are filed, you will need to wait a few days for the Secretary of State to review your paperwork. If everything is filled out correctly, a registration certificate will issue, and you will receive your certificate and registration number.
What do I need to do once my LLC is registered?
After your LLC is registered, you will need to obtain an Employer Identification Number for your LLC. Your EIN number is a distinct number that will identify your company, like a social security number for your business. You’ll use your EIN number to open business accounts and file your taxes.
Yearly you may also need to file an annual report with your state and pay a renewal fee.
In addition, you will need to create an Operating Agreement for your company. The Operating Agreement is basically the blueprint for how your business will run, and outlines the rights and responsibilities of the members.
What are the benefits of owning an LLC?
Having an LLC versus having a sole proprietorship will enable you to protect your personal assets from liabilities of the LLC. You will be keeping all of the business income and liabilities separate. Additionally, it helps you look more professional, and investors, banks, clients, etc. will look more favorably upon you for having your own company. Additionally, you can easily transfer or sell your membership interests in your company by adding or withdrawing members.
What types of businesses can be LLCs?
This is a great question! An LLC is beneficial for a variety of businesses, such as stores (both physical and e-commerce), service providers, food trucks and restaurants, and real estate investors, to name a few. If you’re a small business and not really looking for angel investors or capital funding, an LLC is a good start!
I need help with my LLC.. can you help me?
Absolutely! We offer LLC packages that are completely done for you, so you don’t have to worry about a thing.
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