Starting a LLC

When Starting a LLC it is important to know exactly what an LLC is. An LLC is also known as a limited liability company. This kind of company structure combines both the pass-through taxation of a partnership or a sole proprietorship and the limited liability of a corporation. The owners of an LLC are responsible for reporting  the profits or the losses of the company on their personal tax returns. An LLC is not a separate tax entity. All LLC owners are however protected form personal liability for the debts of their business and of claims. This means that if the company is faced with a lawsuit that only the company’s assets are at risk and not the personal assets of the owner. It is possible to lose that protection if a company’s owners or it’s shareholders are acting illegally or unethically.

When you are Starting a LLC there is only one owner that is needed but there can be more. It is a good idea to form an LLC if you are concerned about your personal assets in a lawsuit or any responsibility that may arise from debts. The LLC gives you personal protection for claims against your business.

When you are Starting a LLC you might also want to consider  preparing an  LLC operating agreement even though most states do not require it. The operating agreement simply states the responsibilities and the rights of LLC owners. This will save a lot of time and a lot of energy if your LLC has more than one owner and the business comes across the problem. The operating agreement will state who is responsible if a certain problem arises.

In most of our states , Starting a LLC  is simple. You start by filing articles of organization with your local Secretary of State’s office and by paying a filing fee. The papers you file are usually called  articles of organization in most states. The form takes only a few minutes to fill out. The form can be mailed to you or the form can be downloaded from your state’s website. In some states you need to publish you intent to start an LLC with your local newspaper.