There are several business structures for businesses to choose from, depending on their needs. These include corporations, general partnerships, sole proprietorships and limited liability companies. A limited liability company or LLC is one of the simplest ways to structure a small business while still benefitting from the advantages of an ordinary corporation.
What is an LLC Company?
When compared to all other business models, an LLC is a type of business structure that offers business owners the most flexibility, simplicity and security.
Flexibility in ownership
By forming an LLC, the structuring allows it to be owned by one or more people. The owners are known as members, and the business can be a single-member or multi-member LLC.
Protection of personal assets
The owners of an LLC are not responsible for any debts or lawsuits against the business unless they are incurred through criminal behavior or fraud.
Taxes for the profits of the LLC are paid by the owners on their individual tax returns. The LLC income itself is not directly taxed. This is known as pass-through taxation. Unlike other business structures, an LLC also has the flexible option of choosing to be taxed as an S-corporation or C-corporation. Using the LLC structure is therefore also highly beneficial for startups.
LLCs are easy to maintain because they have less paperwork and aren’t required to hold annual meetings, keep detailed records of meetings and resolutions, or assign formal officer roles.
The creation of an LLC makes a company more credible in business dealings and paves the way for easier access to credit and loans.
How to form an LLC?
LLCs are best formed in the state or states where the business will operate. If a business is going to have a presence in more than one state, then it will need to register as a foreign business in multiple states. Members should lay out all the details about the management, business operations, funding, and potential dissolution of the company in an operating agreement.
Even though the process is easy to follow, some people may prefer to hire a service provider to do the forms for them.
There are 5 easy steps to forming an LLC:
Step 1: Selecting the state where the business will be registered.
Step 2: Choosing a name for the LLC.
Step 3: Finding a preferred registered agent that lives in the state of the registered business.
Step 4: Filing the LLCs Articles of Organization
Step 5: Creating the operating agreement where the members, management, voting, capital contributions, profit and loss sharing membership changes, and LLC dissolution are laid out. The agreement can also include any other circumstances or requirements that may affect the business. Operating agreements can also be updated at a later stage. All members of the LLC should keep a copy of the operating agreement, and some states require all LLCs to have one in order to register as a business entity. You can also create your LLC by using some LLC formation service providers. One of the best in the market is currently is Zenbusiness. If you feel like it — you can check some of the reviews of Zenbusiness here. They truly do a great job helping new businesses to incorporate themselves quickly and efficiently.
What forms are required to create an LLC and where to find them?
The forms required for an LLC are simple to complete and they can be filled out by the individuals. However, if preferred they can also be professionally done by a lawyer or business service provider.
The Articles of Organization is the document that will outline all the information about the LLC. In most states it is very straightforward and simple to fill out. Once completed, this form has to be filed with the Secretary of State filing office. Free legal filing forms can be found online, but care needs to be taken when filling them out so that they comply with the state where the LLC is formed. These are submitted with a filing fee which also differs in different states.
Using a generator tool to successfully complete your LLC forms
Generator tools are the easiest way to form an LLC as they can take the applicant through the whole process without them missing out on any of the important steps. All that has to be done is to select the state where the LLC will be registered and the generator tool takes the applicant through the requirements for that state.
With TRUiC’s operating agreement generator tool, applicants can create an account and use the tool to instantly draw up a professional operating agreement for their LLC. They can also use a recommended professional service to form their LLC, just get a free guide for the state or states that they are interested in. The guides walk the applicant through the process step-for-step, even allowing them to check the chosen domain name for their business and to nominate a registered agent.
Articles of Organization and Initial Statement of Information forms for each state are available to download and fill out or to file online. An EIN number is essential for the opening of a bank account, taxation purposes and the hiring of employees and can be applied for online from the IRS.
In summary, filing the forms for staring an LLC has never been easier, even for international applicants interested in doing business in the United States.