If you are sitting on a great idea for a product or service, there is no time like the present to start your own business. Having spent years in the private sector working for others, you have accumulated vast professional knowledge and expertise–why not use those attributes to get your own venture off the ground? Understandably, entrepreneurship can feel daunting as it carries a certain degree of risk. With enough hard work, however, you can do everything you need to in order to position your company to succeed. That means spending long hours at the outset tailoring your business plan in a smart and comprehensive way. With your market identified, you can then take steps to hire a team and give your business a legal structure, such as a limited liability company (LLC). If you have found yourself at a juncture where it is time to seriously consider making your company an LLC, you are going to want to know a bit more about this structure as well as how you can process the necessary paperwork online.
What does it mean to give your business or organization a legal structure? Well, in very simple terms, it means establishing your business as its own legal entity. In an LLC, for example, your business can enjoy many of the same rights as an individual. That means that an LLC can borrow and lend money, pay taxes, own real estate, and hire and terminate employees. There are also tax and legal incentives involved in starting an LLC. While LLCs are fairly common among business owners, they are not the only available option, and some entrepreneurs opt to form corporations or limited liability partnerships (LLPs). Ultimately, the structure you decide on will depend on the needs and goals of your business, but as a general rule of thumb, LLCs maintain a degree of popularity because of their ease of setup and valuable benefits.
Why You Should Consider Making Your Company an LLC
As a business owner, you likely feel a deep sense of obligation to your employees and customers. To be more precise, you know on an innate level that you need to do everything in your power to position your business for success. This can mean taking a long-term view on your business, and one way in which you can do this is by making your company an LLC. There are a few reasons why this is considered a sound maneuver for a business owner. For one, when you create an LLC, you give yourself and the other members the benefits of limited liability protection. In this business formation, should your organization experience bankruptcy or face costly lawsuits, you will be able to protect your personal assets from any possible legal judgments. To put it another way, you do not need to worry about depleting your savings accounts or losing your home if something happens to your business.
Another factor that is appealing to business owners with regard to limited liability companies pertains to taxes. The Internal Revenue Service (IRS) considers LLCs to be “pass-through” entities. This means that profits, losses, credits, and deductions earned by your business can be passed to the members of the LLC. This designation can help you avoid paying taxes “twice,” so to speak, which comes in contrast to certain corporate structures.
Limited liability companies are also available in all 50 states. LLCs are also fairly easy to create and do not often require much in the way of annual reporting, though that will depend a bit on the state in which your business is located.
How to Form an LLC Online
If you have weighed all of your potential options and have determined that an LLC is right for your business, there will be a process for you to follow in order to make it official. First, you will want to choose a name for your organization that does not match any other LLCs registered with your local Secretary of State. Next, you will want to decide on a registered agent for your business. This individual will be tasked with handling all legal, tax, and government correspondence on behalf of your enterprise.
With those basic items in place, you can move ahead with drafting your certificate of formation (sometimes called articles of incorporation). This document should include some basic details about your business such as its name and address, and it should identify your LLC’s members and registered agent. You can work with us at Corporation Center to draft this document online. We have easy-to-fill web forms to create LLCs in all 50 states.
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Whether you are looking to launch an LLC, corporation, or an LLP, we can help. Take a moment or two to explore our website’s navigation menu. You can also visit our Frequently Asked Questions page, or contact one of our customer service representatives by phone or email to learn more.
