To open and operate an LLC, you just have to pay a minimal fee, file the appropriate paperwork, apply for applicable licenses or permits, or maintain compliance on a yearly or quarterly basis. The main reason many individuals choose to form an LLC rather than another type of business entity is to benefit from the limited liability protection that owners or associates get when conducting business as a properly structured LLC. An LLC is usually established by a member or members through a written document known as an Operating Agreement. The Operating Agreement is a statement of the business's objectives, purposes, and general terms of management and control. It is important to examine the Operating Agreement closely to understand its importance and establish if it satisfies the test for the formation of an LLC.
How To Start An LLC - First Basics
One way to determine the legitimacy and legality of your proposed LLC is by looking at the contact information listed on the website. A good indication that your proposed LLC is legitimate and meets the requirements for formation is if the LLC has a contact page listed. The contact page will also list a registered agent service. If the name of the registered agent service does not match the LLC's contact information, or if the registered agent service is not a member of the LLC, then your investigation may be hampered. You should still consider the option of filing for an additional agent if necessary, though, in case the first registered agent does not meet the requirements for formation.
How To Start An LLC For Business
Every state has different definitions of how to start an LLC, as well as different regulations for how to conduct business and stay compliant with various tax laws. You should consult a professional CPA to find out what the applicable definitions and regulations are in your state. While most companies and LLCs file all their taxes with the IRS, some choose to file separately. In either case, the tax forms filed with the IRS are not always identical to those filed with state tax agencies.
In some cases, the address of the CPA or accountant on the LLC's filings may not match the address on the filings for state taxes. If this is the case, you will need to conduct background research into the owners of the LLC. Visit the website of the IRS website and search for a list of disqualified owners and corresponding tax causes.
How To Start An LLC - File Your Paperwork
The next step involves contacting a professional service that can help you file your paperwork with the appropriate state agencies. Your selected service will provide guidance and assistance with the entire process of filing your paperwork and operating agreement. In most cases, these services charge a filing fee, but there are some options that offer a free initial consultation. Before you proceed, it is important that you understand all the filing fees and any applicable license and tax identification number fees before you sign anything. It is also important to understand all the terms of the operating agreement before you sign.
Setting Up An LLC
The next step in this series of How to Start an LLC series is how to set up an LLC. After you have determined your filing status, the next step is selecting an operating agreement. The operating agreement is the document that binds all members of the LLC. It must be designed carefully to avoid any conflict with other parties that may be involved. A qualified professional service can help you draft the appropriate operating agreement.
Reporting Financial Information
The final step in this series is about how to report your personal financial information. The reporting of personal financial information begins with the filing of your individual income tax returns. Next, prepare your company income tax returns and work closely with your accountant to report all your earnings and expenses. Finally, file all federal and state taxes including sales and use taxes. An accountant or tax lawyer can help you understand the complicated tax codes and prepare your return correctly.
This article on how to start an LLC is not intended to be a complete discussion of the various topics that are addressed in the series "How to Start an LLC" nor does it address the complex issue of liability protection. If you need more guidance with these and other issues please consider hiring a qualified business attorney. A business lawyer will be able to offer you a comprehensive view of how to best structure your limited liability company so that your personal assets are protected and your business structure remains simple and profitable.