LLC Incorporation

Taking your business or idea to the next level involves formalizing your structure to take advantage of legal and tax benefits.  For many, LLC incorporation is the preferred choice over a corporation. An LLC will give its principals many of the same benefits of a corporation without the encumbrances of all the formalities. The owners are referred to as members in place of officers and the taxes are passed through to the members, not paid at the business level, this is the ideal structure for small businesses and is allowed in all states.

The first step in the process is to determine a name for your business and check for availability.  All states have a Secretary of State website.  On your state’s site you can perform a search to determine if the name you chose is available and once you have determined your business name you will continue the process of LLC incorporation by selecting a registered agent and filing the articles of organization along with the proper filing fee for your state.  The registered agent is usually a member of the business and is responsible for maintaining the proper registrations and paperwork for the company.

After the articles of organization are filed, the members need to meet to form an operating agreement and file for a federal tax identification number with the Internal Revenue Service.  The operating agreement of the LLC will list the specifics of the business operation and include things such as day to day operating, percentage of ownership and buy sell agreements. To begin operating it is necessary to have a federal tax number as setting up a bank account would not even be possible without a tax number.  The IRS makes this process extremely simple and the number can be obtained almost instantly.

LLC incorporation is a very simple process with the proper information and paperwork.  The advantages such as less ongoing paperwork, pass through taxation, limited personal liability and no US citizen or permanent resident requirement over a corporation have made it the most popular choice for new small businesses. It is recommended that you consult with a legal representative to assure that all the required paperwork is completed specific to your state. Knowledge is power and getting your new business off to the right start will allow you the peace of mind to start concentrating on profit not paperwork.