Filing Services

When considering the business entity best suited to your needs as an entrepreneur, you might choose to form a Limited Liability Company (LLC). A small business owner who chooses to form LLC, rather than incorporate as a corporation or s-corporation, operates an entity with fewer legal formalities and friendlier taxation. LLC formation also results in easier management and limited compliance requirements.

Before you form LLC, you will need to know what’s involved to operate an LLC. The owners of an LLC are known as “Members” rather than “Shareholders” because an LLC does not require the issue of company stock. At the time of LLC formation, the Members adopt the Operating Agreement, which is the central document of an LLC and stands as the Members’ written agreement to follow the rules and procedures for operating the LLC. The Operating Agreement should also specify what percentage of the LLC each member owns. Members can make changes to the Operating Agreement as the business changes and grows.

If you form LLC, you will need to determine if the LLC will be Member-Managed or Manager-Managed. The Member-Managed LLC is the best choice or entrepreneurs who prefer ease of management and is therefore the most common form of LLC management. A Member-Managed LLC is managed with each Member participating in the daily activities of the business. If an LLC is Manager-Managed, the company designates a manager or managers (who may or may not be a Member or Members) to run the business day-to-day with the Members typically only involved as investors.

It may be of personal and financial benefit for an individual to form LLC. The 1-Person LLC is now recognized in all 50 states and offers personal liability protection, business credit building and easier taxation. The 1-Person LLC is taxed like a sole proprietorship with the LLC profits and losses added to the owner’s personal tax returns, and is a great alternative to entrepreneurs just starting out who may want to add additional Members to their LLC in the future.

Regardless of the LLC’s size or purpose, you need to choose a state in which to form LLC. The majority of entrepreneurs form LLC in their home state for convenience, in addition to avoiding the extra fees that add up with LLC formation in another state. If you were planning to form LLC in Delaware but operate your physical business in California, for example, the state of California would require you to re-register the LLC as a “foreign corporation” (a company that was not originally formed in California) and you would typically be subject to all the same annual legal fees, licenses and taxes as an in-state company. If you form LLC in the states of Delaware, Nevada or Wyoming, know that virtually every state has laws that require an LLC to re-register these states’ LLC’s in their home state.

If it seems like the best option for you to form LLC, you can efficiently form LLC online using an online incorporation service. Online LLC formation allows you to file the LLC’s Articles of Organization or Certificate of Organization in accordance with state law and is a good way to follow all legal procedures while saving time to focus on your business.

When starting a company, many entreprenurs decide to form a Limited Liability Company (LLC) rather than incorporate as a corporation or s-corporation. Because an LLC provides easy management and limited compliance requirements, it has surpassed the corporation as the choice entity for small business owners. An LLC provides the same liability protection as a corporation without the corporate formalities. The owners of an LLC are known as “Members” and operate by rules set forth in the Operating Agreement, which can be modified with Members’ approval as the business changes and grows.

Small business owners who form an LLC have the additional benefit of less complicated taxation. Much like a sole proprietorship or partnership, LLC profits and losses are added to the owner(s) personal tax returns. Additionally, you may choose to form an LLC as an individual to reduce your personal liability and shield yourself from business debt or any potential lawsuits. The 1-Person LLC is now recognized in all 50 states.

To form an LLC, first the Member(s) must choose the state in which to form an LLC. The majority of small business owners choose their home state for convenience, in addition to avoiding any extra fees to forming an LLC in another state. For example, if you were planning to form your LLC in Nevada but operate your physical business in Texas, the state of Texas would require you to re-register your LLC as a “foreign corporation” (a company that was not originally formed in Texas) and you would typically be subject to all the same annual fees and taxes as an in-state company. There are valid reasons for some LLC’s to be formed in the business-friendly states of Nevada, Delaware or Wyoming but if you form an LLC in one of these states you will need to know that virtually every state has laws that require an LLC to re-register a Delaware, Nevada or Wyoming LLC in their home state.

Once you have chosen the state for your LLC formation, you can form an LLC online. Forming online is an efficient way to file your Articles of Organization or Certificate of Organization in accordance with state law. Starting the process to form an LLC can be done the same day with an online order, but processing the state paperwork will take longer depending on the state in which you form an LLC. Some states take 3 days, but others will take several weeks.

When you receive your LLC filing back from your state, you and any Members of your LLC will need to adopt the LLC Operating Agreement to determine the percentage of ownership by each member. The Operating Agreement is also the central document of an LLC and stands as the Members’ written agreement to resolve disputes and follow procedures. The Operating Agreement should include methods for adding or removing any Members, distributing profits and handling internal matters. Managing an LLC typically requires only one Annual Members’ Meeting to discuss and approve any changes to the Operating Agreement.

An LLC can be managed in one of two ways: Member-Managed or Manager-Managed. In a Member-Managed LLC, the business is managed with each Member participating in the company’s daily activities. In a Manager-Managed LLC, the company designates a manager or managers (who may or may not be a Member) to run the business day-to-day with the Members typically only involved as an investor. The most common way to manage an LLC is Member-Managed, especially for small companies that are looking for ease of management.

There are advantages to forming an LLC that might be right for you, including the safeguarding of your personal liability, building a separate business credit profile, adding creditability to your business, simplified management and protection of your 1-person company if you form an LLC as an individual. You can form an LLC online using an online incorporation service.

• Entrepreneur.com Daily Dose – The State Of Entrepreneurship http://ow.ly/Z8jn #
• 3 Ways to Talk So Clients Listen http://ow.ly/Z82k #
• Eight Steps to Attracting Clients http://ow.ly/YHW5 #

• Startups: 10 Things MBA Schools Won't Teach You http://ow.ly/Wjzh #
• Incorporation and LLC Formation Free Guidebook http://ow.ly/WOvE #
• How Companies Can Help in Haiti – Harvard Business Review http://ow.ly/WDrq #
• Why You Must Adopt an Entrepreneurial Type Mindset In This Day and Age http://ow.ly/Wk9N #
• Home based Businesses You Can Start In Your Pajamas in 2010 | Inc.com http://ow.ly/VFOC #
• Can You Bootstrap? – Harvard Business Review http://ow.ly/VttG #
• Seth's Blog: The lesson from two lemonade stands http://ow.ly/VeT3 #
• How to Run a Business from Home | Inc.com http://ow.ly/VeDG #

• About what I expect: IRS Has 70% Error Rate in Issuance of Taxpayer ID Numbers, Resulting in Fraudulent Tax Refunds http://ow.ly/P6rq #