Form a Limited Liability Company
Forming a limited liability company (LLC) provides liability protection for any type of business, and should be among the first steps you take as a new business owner. Starting an LLC can help you protect your personal assets while adding legitimacy to your company.
What are the benefits of starting a limited liability company for your business?
LLC Formation FAQs
Limited Liability Company’s have become extremely popular among new business owners when choosing the legal structure of their business. LLC’s have a great balance by having a low amount of annual and ongoing filings with the added benefit of limiting owners/members liability when it comes to lawsuits. Below are some of the most common questions prospective business owners have about LLC’s:
- What is a limited liability company (LLC)?A limited liability company, or LLC, is a business entity created under state laws which has the characteristics of both a corporation and a partnership. Like a corporation, the owners of an LLC are not personally liable for business debts. Like a sole proprietorship or partnership, an LLC has operating flexibility and is a pass-through entity for tax purposes. This means the LLC’s profits are passed through and taxable to the owners of the LLC.
- What exactly is Liability Protection?LLC’s provide liability protection by separating personal assets from those of your business. By doing this, it prevents the owner(s) from being personally responsible for the debts and liabilities of the business beyond their initial contribution and investment level in the business.
- What types of Businesses are LLC’s good for?LLC’s are an excellent business structure for most businesses because of their similarity in limiting liability as Corporation without the same level of complexities and formalities that are required to operate a Corporation. Unless you plan to raise significant investment money an LLC will likely work well with your business. Some businesses are prevented from forming an LLC, however. Typically financial companies such as banks, financial trust companies and insurance agencies can’t file as an LLC, however if you fall into one of these categories we can still help you form under the proper structure.
- What documents are required to form an LLC?To create an LLC, Articles of Organization must be filed with the Secretary of State or appropriate state agency. Next, the LLC members should enter into an operating agreement, which sets forth the rights of the members and the rules for running the company. An LLC may also need to apply for a tax identification number with the IRS.