Most people dream about opening their businesses in an area of field they love working in. When one gets serious about converting this dream into reality, one can do in many ways depending on the type of entity he chooses. Sole proprietorship, Limited Liability Company, Partnership, S-corporation etc. are some of the entities one can register their business as. Among all of these entities the one that is most commonly utilized by businesses all around the world is the Limited Liability Company generally abbreviated as LLC.
Before one learns how to start an llc, one should know what an LLC is. LLC is a very flexible business structure which separates individual’s personal assets from his company assets, so even if the company does not succeed, his personal gains and belongings remains unharmed. Owners of an LLC are called its members. These members however can be individual, individuals, corporations, other LLC’s and even foreign entities and it does not have any upper limit of how many members can exists in one particular LLC.
To prevent confusion only one LLC with the same name can exist in any state. When it comes to paying government taxes, an LLC can be chosen to be treated in form of partnership sharing profits or as a corporation, or its tax can separately be paid without combining the profits with its members.
There are a lot of benefits for choosing LLC over other forms of entities. LLCs provide liability protection to members who are not in charge of any of company debts and obligations. People who have paid money to the company cannot go after the personal belongings of the members of the LLCs if the LLCs fail to generate profits and revenues. In entities like sole proprietorship the individual and the firm work as a single entity. Lenders can sue sole proprietors for their homes, savings, accounts everything.
LLCs may or may not pay taxes like companies do. Profits or losses can be passed directly to the respective members of the LLCs and can simply the tax process by a lot. It is always easier to pay taxes on a personal level. LLCs have higher credibility among people because people know one is serious about business that’s why they have made a commitment by registering their business. LLCs are sparred from filling out tons of obligations and documents like S and C corporations entitled to make.
In order to Form an llc company one has to obtain an Ein number for the company. One can easily obtain the Employer Identification Number by entering all the asked information correctly on the website and that the website’s EIN Specialists will fill the same details properly in the paperwork that will be done with the IRS. The website has had achieved 100% accuracy because all of the work is cross checked.
One can attempt to fill the paper work on his own but the paperwork is so intricate and complicated that one will end up spending a lot of time in obtaining the Ein number for the company, the time which would have been better utilized actually working in the company. One of the members of the LLC has to be denoted as the managing member and will be required to provide their official name and respective documents.
