Limited Liability Company

By Bruce Willis

A Limited Liability Company is a legal form of organization that possesses features of both corporations as well as a partnership but this variation of business offers limited liability security to its owners. In other words the proprietors of the company can't be held fully liable for any debts that the business occurs or acts carried out on its behest. This variation of business type is best for small commercial enterprises with that have a smaller number of proprietors and preferably only one.

So what are some of the cardinal characteristics attached to a Limited Liability Company? Well for starters the owners of an Limited Liability Company are not partners or stockholders like they are in other forms of business they are members and all LLC need to retain at least one member. Members of an LLC can't be held personally liable for the tab incurred by the business and such is the same as for a corporation. However do not make the error of signing any documents in which you give your personal promise that the organization will pay a fee or live up to a promise. If the company for whatever purpose does to pay that bill or meet an agreement then you cannot be held responsible.

So in the same way a corporate empire you being an proprietor may utilize an LLC as a sort of defence for your personal effects and dependent on the form of business you'd want to form such things can be very critical if a bad event were to happen. As being an LLC also accommodates you some legal protection in the even the company were to be sued for some purpose. Occasionally having protected from your organization is the most critical thing of all.

Now how is a Limited Liability Company similar to a affiliation? Plain and simple it is all in the taxes since LLC's are at all subject for the double taxation rule enforced on businesses. To clarify the rule is simple: If your company is a corporation and you make a income for the year that profit have to be taxed. After the income is taxed, then you being the owner can yield the profits and give them to yourself as the owner along with any the other people who own a piece of the business - this of course is your own to distribute. Well the IRS sees the allowance as being personal revenue and it is again taxed as part of your own taxes though within an LLC the earnings aren't not taxed. The earnings are passed to the members based upon the percentages that had been previously arranged and it is only then that they're taxed as personal earnings, when that individual files their taxes for that year.

Additionally if the business loses money for that year all owners of the LLC are able to subtract the equal loss discount from their income. You will as a matter of course need supporting papers to justify the loss to the IRS. And if the members do desire to keep their earnings in the organization for business applications then the Limited Liability Company can docket a tax return of its own.

What the majority of individuals gain from a Limited Liability Company is flexibility as you can build the management however you want see fit and you have the defence of a large company for your personal assets. You could also decide to either abandon your earnings in the business, get them taxed or the income could be distributed and the members can pay the taxes themselves, however you stay away from the double taxation penalization that businesses could bring down on themselves. - 31806

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Business Owners: Form An LLC

By Michael Davis

When forming an entity, it's always a good idea to think the process through before you begin. Entity formation can be as complicated as you make it or as easy as 1,2,3. In this article, I want to highlight a few of the most popular entity structures that are being used by most business owners. Enjoy your reading!

Let's talk about verbiage just so we are on the same page when we discuss entities. Corporations and LLC's are types of entities. These shouldn't be used in place of the word entity when speaking with an attorney or accountant because they might misinterpret what you are asking them to form and it could end up costing you lost of money.

One of the major reasons why people form corporations is to avoid paying personal taxes. It's a great tax savings vehicle. With the proper planning, a lot of business expenses can be written off and consequently save you tons on money on your personal tax bill, as the owner of the company. Liability protection is another great reason to incorporate your business. You just want to make sure you incorporate in the right state for the optimal tax savings.

All states recognize the Limited Liability Company as a legal business entity. These entities are very easy to setup and most states have online portals to file them yourself. If you are unsure how to go about filing it, consult with a tax accountant or attorney and they will complete these steps for you.

If you do nothing but get a business license, you are essentially a sole proprietor. Sole proprietorship don't have to apply for a nation employer identification number and most of the time can just use their personal social security number as their recognizable ID. When it comes to taxes, the return for a sole prop business is schedule C of the 1040. This is found on your personal tax returns. It's easy to start a business and it you don't have the money to file another type of entity, just do this.

Both Corps and LLCs offer similar advantages when trying to raise money from outside capital sources. It's hard for an investor to take a piece of equity in a sole prop. It's impossible because it's just you. Having a separate entity allows for investors to come in and invest in exchange for equity. - 31806

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Complete Separation for Small Business Owners

By JR Romagaux

Words can't describe how important it is that business owners separate themselves from their business. If you don't understand why you should never co-mingle your personal and business activities, please continue to read, do some deep research or get sued by a business creditor and see how far his attorney will go to take everything you own personally. It's not a fun route to travel on. Let's do it right the first time and start to learn ways of separating yourself from your growing enterprise.

Getting some business cards and letterhead printed also makes you seem more legitimate and gets you just a little closer to full separation. Opening a bank account and avoiding the co-mingling of funds also is a great step in the right direction.

A sole proprietor is what people are called that run a business without separation of a legal structure. You can definitely success as a sole prop but you expose yourself to liability issues by not having business transactions run through a separate entity. A partnership is also another type of business structure that doesn't completely separate the business owners from the business. There are dangers with this entity type as well.

If you don't want to go the Sole Prop or Partnership route, you can always form a limited liability company or a corporation. To do this you have to file some paperwork with your state or the state in which you want to conduct business. You will also need to contact the IRS and apply for an employer identification number. This can be done online and only takes 5 minutes.

A word of caution and warning for sole proprietors and partnerships: you and/or your partner(s) will be wholly liable to settle all business debts and obligations if creditors come knocking. Your business doesn't stand on its own and therefore won't settle debts on your behalf. You are one in the same with your business.

My recommendation to people who want to start a business is always the same, form a completely separate entity. One that will not be exposed to liability issues. Either form an LLC or a corporation, period. But that's just my opinion. Since there are several types of limited liability companies and corporations, you should definitely talk with an accountant or attorney, who have experience in forming entities, before you make the decision on which one. Both of these types are beneficial to small businessman for various reason but the primary, in my opinion, is the separation of business and personal affairs that gives you some liability protection. - 31806

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Know Your Options Before Your Form An LLC

By Michael Davis

When forming an entity, it's always a good idea to think the process through before you begin. Entity formation can be as complicated as you make it or as easy as 1,2,3. In this article, I want to highlight a few of the most popular entity structures that are being used by most business owners. Enjoy your reading!

When you talk with you accountant, legal adviser or entity former make sure you understand what you are asking them to do. If you say that you want a corporation setup then that's probably what they will do. If you say that you want an entity setup, then it's a broader question and they will dig deeper to find out which type of entity structure you need.

One of the major reasons why people form corporations is to avoid paying personal taxes. It's a great tax savings vehicle. With the proper planning, a lot of business expenses can be written off and consequently save you tons on money on your personal tax bill, as the owner of the company. Liability protection is another great reason to incorporate your business. You just want to make sure you incorporate in the right state for the optimal tax savings.

All states recognize the Limited Liability Company as a legal business entity. These entities are very easy to setup and most states have online portals to file them yourself. If you are unsure how to go about filing it, consult with a tax accountant or attorney and they will complete these steps for you.

Sole Props are easy to form. It literally is a simple as saying you are in business, going to your local city offices and getting a business license. The other form of business entities cost money to form and sole props don't with the state. If you want to setup a DBA with the state then there will be a small fee. This is by far the easiest way to role for small businesses that don't have the budget to fully incorporate in the beginning.

With Corporations and Limited Liability Companies, you are literally creating a separate entity from which to operate your business. Having a stand-alone entity is a smart way to operate if you are trying to raise capital from investors or banks. - 31806

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Form An LLC By Following These 5 Steps

By Caressa Waechter

Setting up a Limited Liability Company is a short, simple process that will be beneficial for years to come. This popular structure for small businesses has been around for the past 20 years. Every state recognizes an LLC, even though the requirements vary between each state. The following information will help in getting started with the formation of an LLC.

1. The state Articles of Organization form - Once this form is received, you will have a better idea of what is needed to begin the LLC. Having these Articles of Organization in hand is just the first step.

2. Choose a name - Each state dictates what a business name can include and there are certain words that are prohibited. Words such as; City, Insurance, Incorporated, and Corporation are a few of them. Whatever the business name is, it must end with the letters "LLC".

3. Complete the Articles of Organization form - The completion of this form is key to the whole formation. It will be here that the name of the business, the people involved with its formation, the person obtaining all legal papers, a main business address, a list of the members, as well as the whole purpose of beginning the business, is all documented.

4. Notify the newspaper - For states that require newspaper notification, this can be proceeded with after the Articles of Organization has been fully completed.

5. Turn in the Articles of Organization form - Make sure the amount for the fees is known when turning in this form, it will make the process run a little smoother.

Once the Operating Agreement is signed, the LLC is available for business. The process of setting up a Limited Liability Company has just a few steps involved. Be sure to fill out all the correct forms and follow the information provided by each state, this will make completion simpler. - 31806

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Creation Of A Limited Liability Company

By Larry Grayson

A Limited Liability Company is a legal form of company that has features of corporations as well as a partnership but this form of organization offers limited liability protection to its managers. So basically the proprietors of the company can't be held completely liable for any debts that the business occurs or acts carried out on its behest. This sort of business type is best for small commercial enterprises with that have a smaller number of proprietors and normally only one.

So what are some of the simple characteristics attached to a Limited Liability Company? Well for beginners the proprietors of a Limited Liability Company aren't partners or stockholders as they are in other variations of business enterprise they are members and every LLC's has to have at least one member. Proprietors of an LLC cannot be held individually responsible for the debts incurred by the company and such is the standard for a business. But don't commit the error of signing any documents in which you give your own promise that the company will pay a fee or honour a promise. If the company for some purpose does not cover that bill or live up to an arrangement then you can be considered accountable.

So just like a corporate empire you as a proprietor may use a Limited Liability Company as a form of protection for your personal effects and reliant on the sort of business you'd desire to found this can be very important if something were to happen. Because being an LLC also accommodates you with legal defense in case the organization were to be sued for some purpose. Sometimes having protected from your organization is the most essential thing of all.

So how is a LLC similar to an affiliation? Plain and simple it is all in the taxes since LLC's are at all subject for the double taxation rule pushed upon corporations. To as an explanation the rule is simple: If the organization is a corporation and you bring in an income for the year those earnings need to be assessed. After the profits are deducted, then you as the proprietor might yield the profits and hand them to yourself as the proprietor along with any the other people who own a percentage of the business - this in fact is your own to distribute. Well the IRS views the allotment as earned income and it is once more taxed as a portion or your personal taxes though in an LLC these profits are deducted. They are passed to the members based upon whatever allowances have been already worked out and it's only then when they're taxed as personal earnings, when that person reports their taxes for the year.

Also if the organization loses money for that year every owners of the LLC can subtract the equivalent loss percentage out of their income. You'll in fact need supporting papers to affirm the deficiency to the IRS. And if the owners do want to keep their income inside the organization for business reasons then the Limited Liability Company can file a taxation return of its very own.

What most people obtain out of a Limited Liability Company is adjust ability because you can structure the administration however the members it and you have the protection of a corporation for your own assets. You may also elect to either leave your earnings in the business, get them taxed or the profits can be distributed and the owners can pay the taxes on their own, but you avoid the double taxation penalization that businesses might bring upon themselves. - 31806

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Have A Small Business? Consider Forming An LLC

By Caressa Waechter

If you want to start a small business and you do not have a lot of budget for the company and are afraid to take risk then you should definitely form a Limited Liability Company. The best thing about such companies is that in case the company goes bankrupt usually only the assets of the company are seized and the owners do not have to pay debts as they may be exempted in a limited liability company (LLC).

An LLC is a true business entity which has to be set up with your state. This process is actually very simple with usually not a lot of paperwork involved.

Once you register, you can attach "LLC" to the company's name. Another thing that you should know that in most countries of the world, there are several advantages associated with taxes for these companies.

If you want to take advantage of the flexibility of taxes, you should hire a lawyer. A lawyer would not only know how to go about taking advantage of the tax provisions but will also take care of registration and other paperwork.

For registration, select a company name and check it either online or go to the company registration office to see if the name is already taken or not. The registration fees are usually very affordable especially if you are registering online. The online registration is a very easy method and it saves you a lot of time and the cost comes out to be very affordable both in terms of money and time.

To form a Limited Liability Company within your budget, you can pre-plan and go and register online as well. It is very cost-effective and you can save yourself from huge losses. With an LLC, usually if the company goes down, you won't be liable to pay the debts and only the company assets will be seized. It is a low risk business scheme for small business owners. - 31806

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