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Corporate System.
Features Fast and
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Corporate System provides incorporation
and LLC formation services
nationwide.
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- What is a Limited Liability Company (LLC)?
- How is a Limited Liability Company formed?
- What do you name a LLC?
- How long does it take to form a Limited Liability Company?
- Does a LLC need a registered agent?
- Does the LLC need a tax number?
- How is a Limited Liability Company taxed?
- Can one person form a Limited Liability Company?
- Are there directors and shareholders with a LLC?
- What determines the structure of a LLC?
- Who manages the Limited Liability Company?
- What are the advantages of a LLC?
- What are the disadvantages of a LLC?
- Is an accountant or attorney needed to form a LLC?
A Limited Liability Company (LLC) is a separate legal entity that offers the limited
liability protection of a corporation along with the advantages of passing through
profits or losses like a partnership.
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In order to form a Limited Liability Company, Articles of
Organization must be filed with the required state fee.
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The name you select for your limited liability company must be distinguishable form any other limited liability company within your state. The purpose of this is to make sure your name is unique and will not be confused with another company. When selecting a name for your limited liability company, you must make sure it does not contain any type of punctuation and must end with the words "Limited Liability Company or the abbreviation LLC or L.L.C.".
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Each state has different time frames which it completes the
filing process. Some states take as little as an hour while
others can take several weeks. Speedy has no control over the
state processing time. Some states offer an expedited service at
an extra charge.
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Yes. All Limited Liability Companies need a registered agent
with a physical street address within the state of formation.
This allows a location for any type of legal documents or tax
documents to be delivered to if they are returned from the
company designated address.
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All Limited Liability Companies need a Federal Identification Number. This is the same thing as an Employer Identification Number or an E.I.N.
and is used as an identification number for the Limited
Liability Company. This number is obtained from the Internal
Revenue Service by filing Form SS-4. Some states use the same
number but others require filing for one with the particular
state.
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In regards to taxation, the Internal Revenue Service allows the limited liability company to be taxed as a corporation, partnership or a sole proprietorship. This election is made when registering with the Internal Revenue Service. Some states treat the limited liability company differently in regards to taxation, so it is important to understand your state regulations in regard to the taxation of a limited liability company, but most follow the federal election.
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The Internal Revenue Service allows a one member Limited
Liability Company for taxation purposes, but some states do not.
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There are no directors or shareholders with a limited liability company. Its owners are designated as "members".
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The structure of a Limited Liability Company is established in
the operating agreement. An operating agreement covers members
interests in the company, distributions of profits and losses,
contributions made by members and any other items that the
members might wish addressed.
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The company can be managed by the members, or the members may
select a manager to manage the company for them. The Articles of
Organization that is filed with the state addresses the
management of the Limited Liability Company.
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- First most, as with the corporation, is the liability protection that is offered. A member's liability is limited by the amount they invested in the company or as specified in the operating agreement.
- Next is the advantage of avoiding double taxation and having the profit or loss pass through to the member. The Limited Liability Company is not taxed itself as it is passed through to the members and only taxed once like the earnings from an S Corporation, Partnership or sole proprietorship.
- Flexibility of management has contributed to the large selection of Limited Liability Companies as the structure of choice.
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- The life of the Limited Liability Company is not unlimited like a corporation. Different events could occur to dissolve the company.
- With a Limited Liability Company comes strict record keeping requirements and some states require notices to be published upon formation and on a continuing basis for a period of time.
- A Limited Liability Company is still a relatively new structure.
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Absolutely not. Any individual can process the required
documents with any state. One should make sure that they are
aware of and understand all the requirements of the selected
state before forming the limited liability company. If an
individual is unsure of, or does not understand the legal or
financial ramifications of forming a limited liability company,
they should seek the advice of an attorney or accountant.
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