Should I Be an Employee of My LLC?

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Steps to Form an LLC

  • Get a unique business name and address in your state.
  • Get the formation document.
  • Get a registered agent.
  • Fill out and file the document.

Considerations for Forming an LLC

  • Forming an LLC gives flexibility to choose taxation and allows easy transfer of ownership.
  • LLC termination gain or loss is determined per member.
  • Track your investment basis, adjusted annually per your K-1.
  • Compare final distribution to basis to determine capital gain or loss.
  • Craft an operating agreement.
  • Most business owners form an LLC rather than a sole proprietorship to protect assets if sued.

Formation Costs and Options

  • The main LLC cost is the filing fee from forty to five hundred dollars depending on the state.
  • Use an online service and pay only mandatory state fees to form an LLC for free.
  • Some companies falsely claim free registration.
  • There are ways to form an LLC for free or at a discount.

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