Form an LLC
What is an LLC and why should you consider forming one for your business?
A limited liability company (often referred to as an LLC) is a relatively new legal entity that combines many of the benefits of a corporation with the benefits of a partnership (without some of the detriments of such organization types).
The primary benefit of a corporation is the limited liability protections afforded to stockholders (the owners), however, corporations that have not made an S Corporation election are faced with double taxation on its annual profits.
The primary benefit of a partnership is that there is only a single tax on profits (not double taxation like a corporation), however, the partners (the owners) face unlimited liability for all of the debts and obligations of the partnership business.
LLCs are unique entities in that they provide their owners (called “members”) with the limited liability protections typically afforded to stockholders of a corporation without the double taxation of a corporation.
Finally, corporations, while they have their own governing documents, such as a certificate of incorporation and bylaws, are basically “creatures of statute,” meaning the governing state’s law will in many cases govern how the corporation legally operates.
LLCs, while subject to the governing state’s laws, are basically “creatures of contract”, meaning the owners (known as “members”) negotiate and enter into a contract (often called an “operating agreement” 0r “limited liability company agreement”) to determine the legal workings of the company. The governing state’s laws regarding LLCs basically act as the default if the company’s operating agreement does not address a matter affecting the company.
LLCs are often regarded as much more flexible than corporations, and have become extremely popular over the last decade.
Who Operates an LLC?
LLCs may be operated by its owners (known as “members”) or by managers (similar to a board of directors of a corporation). This decision is made by the members and is set forth in the LLC’s operating agreement.
Forming your LLC
Filings Made Easy can help you form your LLC. The process is fast and easy. Please click here www.FilingsMadeEasy.com/incorporate-online to get started (or email us at customerservice@FilingsMadeEasy.com or call us at 888-237-3410).
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