- Select a unique name.
- Appoint a registered agent.
- Complete and file necessary paperwork.
- Create an operating agreement.
- Obtain tax ID numbers.
- Acquire essential licenses/permits.
An LLC protects personal assets and maintains limited liability. Forming an LLC provides flexibility in taxation and ownership transfer. However, it can be expensive and time-consuming. The main cost is the state filing fee, which varies between $40 and $500 depending on the state.
The downside to an LLC includes independent taxes, role confusion, insufficient lifespan, transferrable property, and expenses.
- The general rule is that the money or property of an LLC cannot be taken by creditors to pay off the personal debts of the owners.
- Most owners prefer LLCs over sole proprietorships for asset protection.
- LLCs generally don’t need to make income to be considered.
- LLCs operate as pass-through entities for tax purposes.
- An LLC may not be suitable for every business.
- LLCs are cheaper than C corps but more expensive than sole proprietorships.
- Access to capital is a notable advantage of corporations over LLCs.
- Get a unique business name and address in your state.
- Obtain the formation document.
- Appoint a registered agent.
- Fill out and file the document.
- Consult with an LLC service provider for guidance.
Remember to consult with a lawyer and obtain necessary licenses and permits before starting your LLC.