LLC’s are booming in popularity. And for a good reason. They’re cheap to start, are easy to run, and LLC profits aren’t subject to self-employment taxes. LLC’s can also be sold and dissolved without the headache of an IRS audit if the LLC is used as a business vehicle instead of holding assets or property for investment purposes.
How Many People Should Be Part Of The LLC?
You can do LLC business with one person. That single person owns the LLC. If you have other LLC members, they are your partners, and you are all equal owners of the LLC. Some LLCs choose to be managed by a manager or member rather than operating as a partnership, but this isn’t required in most states.
How Long Does It Take To Start An LLC?
LLC’s are quick and inexpensive to form, requiring only a short time at the Secretary of State’s office. LLC members can start business operations after the LLC is created, but because LLCs aren’t taxed in most states until they make money, there isn’t a need to rush your LLC formation.
What Does An LLC Protect You From?
LLCs protect owners from business losses. LLC owners can lose money without it affecting their savings, home, or other personal property. LLC members are also not responsible for business debts and obligations beyond the amount of money they invested in the LLC.
Before you start an LLC, there are a few things that you need to do:
Choose a name for your LLC
Your LLC’s name must contain the words “limited liability company” or LLC and can’t include language that indicates your LLC is organized for any purpose other than a business one. In addition, after choosing a name, you must make sure it isn’t identical to the names of existing LLCs in the state.
Submit Your LLC To Begin Operating
Depending on the LLC filing fee that your state requires, you’ll need to register with a business service. This will include submitting an LLC operating agreement and LLC members’ capital contributions along with the LLC filing fee. The LLC owners or an attorney can write the LLC operating agreement.
How To Notify Everyone You Are Starting An LLC
Once you’ve filed LLC papers, it’s time to tell the county and state about your LLC. This is called ‘filing for LLC status.’ Then, depending on the LLC filing fee that your state requires, you’ll need to register with a business service. This will include submitting an LLC operating agreement and LLC members’ capital contribution.
Final Thoughts For Launching Your LLC
LLCs are a great way to start your business. LLCs let you protect yourself from liability and keep business personal effects separate. In addition, LLCs offer much more freedom than S-Corporations, C-Corporations, or partnerships that some people desire from their LLC operating agreement form.