LLCs are the preferred choice of small business because the easy of its operation and tax saving features

LLCs are the preferred choice of small business owners because they are easy to operate and avoid the double taxation imposed to “C” Corporations.

WHAT IS A LIMITED LIABILITY COMPANY?

A Limited Liability Company is not a corporation, but it offers many of the same advantages. Many small business owners and entrepreneurs prefer this type of entity because it combines the limited liability protection of a corporation with the “pass through”” taxation of a sole proprietorship or partnership.

FORMING A LIMITED LIABILITY COMPANY – LLC

In order to form a LLC, Articles of Organization  have to be prepared and filed with the Secretary of State where the business is going to operate. The Articles are the main filing document which begins the LLC’s existence under state law. Once filed, the LLC comes into existence.

Generally, most jurisdictions require Articles of Organization to contain, at a minimum, information about the following:

  • Corporate Name
  • Business address
  • Main activity
  • Name and address of the Registered Agent.
  • Name and Address of initial Members.

Corporate names must include a name ending such as “Limited Liability Company “, “Limited Company”, “Limited” or its abbreviations, “LLC”, “LC” or “Ltd” (name endings vary state by state)

LLC can elect to be taxed like partnerships, only at the individual level when profits are paid as dividends. This yields a considerable advantage over C corporations, which are subject to double-taxation – once at the corporate level, and again at the individual level when profits are paid as dividends to the shareholders.

A LLC is owned by its members. A LLC may be managed by its members (owners) or by a designated manager. If the members choose, they may elect a manager to act in a capacity similar to a corporation’s board of the affairs of the LLC.

Member management, however is the normal default rule of state law.

 

HOW MUCH DOES IT COST?

The cost of incorporating a business entity has two main components: State filing fee and ActiveFilings’ fees. State filing fees are also based on the type of entity, processing speed and other services offered by the states.

ActiveFilings.com offers 3 different incorporation packages at very competitive prices. Additionally, we can prepare your bylaws or operating agreement, obtain a Tax ID (EIN), prepare your organizational resolutions or provide you Registered Agent services in all US main jurisdictions.

All this information is available here. Select your State and Type of entity from the following list to have instant information:

  

 

Limited Liability Companies are a relatively new business form in the United States, though they have a long-standing history in Europe. LLCs were first formed in the United States in 1977, and were granted pass-thru tax status by the Internal Revenue Service in 1988. This section will provide the answers to the most frequently asked questions about Limited Liability Companies.

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How many people are needed to form an LLC?

As of January 1st, 1999 only two states require two members. These states are: The District of Columbia and Massachusetts.

What is the organizational structure of an LLC?

A LLC is owned by its members. A LLC may be managed by its members (owners) or by selected a manager.

If a LLC is managed by its members, it operates similar to a partnership. Each member has an equal say in the management of the LLC.

If the members choose, they may elect a manager to act in a capacity similar to a corporation’s board of the affairs of the LLC.

Member management, however is the normal default rule of state law.

How is the ownership of an LLC evidenced?

A LLC issues certificates indicating the particular holder’s percentage of ownership in the business. These membership certificates are included in our corporate kit

What are the advantages of an LLC?

LLC offer numerous advantages:

  1. Limited Liability: For the members of an LLC, liability is limited to the amount of capital which the member has invested in the LLC. Therefore, members of an LLC are offered the same liability protection as a corporation’s shareholders.
  2. Pass-Through Taxation: LLC allow for pass-through taxation. That is, the earnings of a LLC are only taxed once.
  3. Flexible Management Structure and Flexible Ownership: LLC are generally free to establish any organizational structure agreed on by its members.

 

How do I get started?

HOW MUCH DOES IT COST?

The cost of incorporating a business entity has two main components: State filing fee and ActiveFilings’ fees. State filing fees are also based on the type of entity, processing speed and other services offered by the states.

ActiveFilings.com offers 3 different incorporation packages at very competitive prices. Additionally, we can prepare your bylaws or operating agreement, obtain a Tax ID (EIN), prepare your organizational resolutions or provide you Registered Agent services in all US main jurisdictions.

All this information is available here. Select your State and Type of entity from the following list to have instant information:

  

 

After your Articles are filed, your LLC should have an organizational meeting where an operating agreement is adopted. We will provide you with the proper Operating Agreement template. Member certificates can be distributed to members and these transactions should be recorded in the LLC ledger. All of this information can be maintained in a limited liability company record book, which is included in the corporate kit that we provide you with our Full or International plan.