LLC Basics for Small Business Owners and New Entrepreneurs

What are the benefits of each business structure? Why form an LLC? Why form a corporation? Click HERE for answers to these questions & more.

COMMON OPTIONS TO STRUCTURE YOUR NEW BUSINESS (& WHAT YOU’LL NEED TO MAKE IT HAPPEN):

  • LLC (Limited Liability Company)

    • Often a good choice for new & small businesses.

    • Provides both protection from personal liability and pass-through taxation (i.e. you can file your biz profits & losses on your personal tax return).

    • You can file this yourself!

      • You’ll need a registered agent (this can be you, the business owner); and articles of organization (sometimes called operating agreement), which can often be filled out directly in the application process on your Secretary of State’s website).

    • Common mistakes on LLC applications:

      • Simple misspellings or inaccurate information about your (& your business) contact information.

      • Not identifying your “title” accurately, i.e. “founder”, “CEO”, etc.

  • Corporation

    • Extensive paperwork & upkeep; more expensive than other options; taxed separately from you (the person).

    • Not recommended to file on your own.

    • Potentially good option if you plan to take on money from outside investors.

  • Sole Proprietorship

    • Does NOT provide any protection from personal liability.

  • Partnership

    • Does NOT provide any protection from personal liability.

    • Sign a partnership agreement for 2+ partners of the business.

EVERYTHING YOU NEED TO KNOW ABOUT FORMING YOUR LLC:

This Q&A landing page from LLC University simplifies the most commonly asked questions about LLC's, including for example:

(1) What is an LLC? Click HERE.
(2) What state should I file my LLC? Click HERE.
(3) What is a Registered Agent? Click HERE.

(4) What forms and info do I need before filing my LLC? Click HERE.

(5) How are LLC's taxed? Click HERE.

For answers to the above & much more!: https://www.llcuniversity.com/learning-center/

OTHER FAQ’S

How to legally structure multiple businesses?

1. Create individual corporations/LLCs.

2. Put DBAs under one corporation/LLC.

Or

3. Create a business under the holding company.

—> Click HERE to read more.

How to change from Sole Proprietorship to LLC?

—> Check out the answer HERE.

How to pay yourself from an LLC?

—> Check out the answer HERE.