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. More information about LLC can be found here: Frequently Asked Questions about LLC
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: