Enjoy The Best Of Both Worlds With An LLC
Author : Mark Thomas
A limited liability company (LLC) is a type of business structure that combines certain parts of corporate and partnership structures. If properly and legally set up, this form of company gives limited liability to the owners, subject of course to the individual state law under which it is established. LLCs can be used for both for profit and non profit companies.
When looking to form an LLC, understanding of the characteristics of such a business structure is very important. This hybrid entity takes on both the features of a corporation and a sole proprietorship or partnership depending on the number of owners. But an LLC is not a corporation. Like a corporation, the owners enjoy limited liability, and other business structures, is the flexibility of pass-through income taxation. This flexibility makes a limited liability company better suited for companies with a single owner.
Furthermore, it is of the utmost importance to understand that a limited liability company does not fully mean that the owners are always fully protected from debts or personal liabilities. If any kind of fraud or misrepresentation is involved comes into play, then like “piercing the corporate veil” occurs with a corporation, so too can it happen with an LLC.
OK, so with the more technical and legal stuff out of the way, it stand to reason that in todays lawsuit happy society that if doing business, a corporation, or LLC is the way to go. For the single business owner, or small partnership, the LLC offers the advantages of the corporation without the paperwork and hassle. But, in any instance, competent legal and financial counsel should be sought to best determine business need.
Setting up a limited liability company isnt a complicated process, either. This article is based upon the laws of Nevada, but most LLC laws are similar in formation. The major difference is usually in taxation. So, to file for a LLC, fill out and file a document known as the Articles of Organization (or similar, depending on the state of formation) with the Secretary of State where you wish to have the LLC domiciled. As well, file an Initial List of Managers or Members, and a Business License Application (or similar) with the Secretary of State, pay the required fees, and youre now a limited liability company.
Now, if you decide to establish an LLC in a state outside of where you live, these are known as Foreign LLCs, but can be set up the same way, just with a different set of paperwork. Check with your Secretary of State or with the Secretary where you wish to set up the LLC for details.
Mark Thomas has served in a wide variety of corporate and entrepreneurial roles and now enjoys mentoring those who want to start their own business by consulting on how to start a limited liability company or incorporate online. For more on these topics, visit us at EZonlineFiling.com