Answers for Entrepreneurs to Incorporate or Form a LLC
the coupon code at Incorporate.com
Now that you’ve made the decision to form a LLC, don’t pay high prices or even retail for it.
What are your options for forming a LLC or Incorporation:
1. Form a LLC yourself – you can go directly to the Secretary of State’s website and form your LLC Articles of Organization and pay the filing fees directly to the state. If you feel comfortable with all the paperwork required this is a pretty good option. However, if you consider your time valuable at all, you’ll skip this option.
2. Hire an attorney to form a LLC – this is the most common approach but also the most expensive. Plus it takes a lot of time to get an appointment, answer their questions and get paperwork signed. In addition, every time you need to make a change the lawyer has you come see them. That’s where they make most of their money is in the changes and updates to the LLC documents. You can spend up to $5,000 to get a LLC structured with a lawyer.
3. Use an Online Incorporation Company for as little as $39 with your discount to form a LLC- We recommend using Incorporate.com. We’ve set-up a special discount for you to receive $60 off when forming a LLC or Incorporation with them. You just need to use our link in the green box below to get the discount. Full Disclosure – Yes, we do get a small commission as well, but you get a LLC formation for up to 60% off the retail price by using this link. If you choose their standard $99 package you are able to form a LLC for just $39 plus state fees.
Here is how it works, just click the link above, on their home page select the state and type of entity you want to form – click submit, choose the package you want – click next, fill out the LLC/Incorporation form on the next few pages. The discount will appear on the pages where you fill out details about you and the company.
Discounts on LLC formation services are rare, and this will not last forever. Click the link above now to get your discount locked in.
Everything You Need to Know About Forming a LLC
The number of LLCs being formed is growing everyday. It’s no wonder, just based on the many benefits having your business structured as an LLC has. A Limited Liability Company merges the good traits of a Corporation and a Partnership without either of their downsides. But before you go and set up your own LLC, it’s best to find out more about what makes it a preferred business structure.
LLCs Are Like Corporations
All LLC members (known as owners) are protected against personal liability for any business debts or claims the LLC has. This means the personal assists of the members cannot be made to pay any loans or debts that the LLC has incurred unless they have provided a personal guarantee or committed some type of fraud. Only the assets of the LLC can be forced to pay debt or a judgement. The only monetary value the members stand to lose is their investments in the company, in case of a judgement or debt.
As stated, there are exemptions to this rule. A member can be held liable if he or she personally guarantees a loan or debt that the LLC defaults, intentionally commits fraud that harms another party or the LLC itself, or treats the LLC as an extension of their personal affairs. Any one of these missteps can cause an owner to be personally liable for their actions. These rules aren’t unique to the LLC structure but are also applicable to corporations.
The LLC vs. a Partnership
LLC’s have the ability to be taxed as a partnership. When filling out the IRS SS4 form to obtain the tax identification number for the LLC, if no other entity type is chosen for how the LLC is to be taxed, it will by default be taxed as a partnership. This means that the LLC is referred to as a “pass-through entity”. The LLC’s taxes pass through the entity to the members(owners) personal tax return. They, in turn, report their profits or possible losses on their individual tax returns.
Another great thing about the LLC is the ease to form. The legal aspect can be taken care of in one to four hours and done online at many Secretary of State websites or you can use an incorporation services online and save the time.
Other Steps Before Forming a LLC
Research State Laws & Fees
Laws on LLCs differ per state, so it’s important to research these and state statues regarding forming and managing a LLC. Although you can form a LLC in any state, you may have to foreign file the entity in the state in which you are conducting business. Many experts will recommend to form a LLC in the state in which you are operating your business. This cuts down on fees and the burden of understanding the laws/statutes of two states.
There are some states that have advantages over others, so make sure you research those along with these other important factors in forming a LLC
Choose a Business Name
A company’s name is crucial since this is its identity. It is also vital for legal documents. There are two choices available for your LLC’s name. It can be either a legal or fictitious name. A legal name is simply your full name or your last name while a fictitious name can be anything under the sun. Make sure that your chosen name is unique to your company. Check your local state website to ensure that there isn’t another company already using the name you want. Another thing to remember is that your name must end in LLC and other variants. It cannot end in Inc. or Co., for instance. According to Section 105 of the Uniform Limited Liability Company Act, a LLC’s name must end only in LLC, L.C.C., L.C., Ltd. Liability Co., Limited Company, Limited Liability Company and alike.
Find a Registered Agent
Finding a Registered Agent is another important step to forming your own LLC. They will be the ones responsible for receiving all legal and tax notices on behalf of your company. A Registered Agent can be a person or business, with a physical address, that is present and available during business hours. A post office box is not an acceptable address in this case. You can be your own Registered Agent as long as you have a physical address and are available to receive documents during business hours. This is a very strict rule, one that specifies that if you are your own Registered Agent you must have someone present during the times mentioned and who would not leave the address even to go on errands.
The registered agent address must be in the state in which you are filed to do business and/or the state where you have formed the LLC.
File the LLC Certificate of Formation
The next step is to file a Certificate of Formation, as it is called in Delaware. Also know as Articles of Formation or Organization, this document officially lets the state know about the LLC and formally documents it. Filed at the Division of Corporations withe Secretary of State the form along with a filing fee is requested for the certificate to be accepted. Within the document, you have to specify the name of the company, its address, the address of your Registered Agent and the date of dissolution, if applicable.
Draft a LLC Operating Agreement
Creating an operating agreement is also advisable though not required by law. It specifically spells out the operating procedures of the LLC and the various roles of its members. Also, this document should state financial and management privileges and responsibilities of each member as well as on what terms they may leave the company. Though it isn’t obligatory to have an attorney oversee the drafting, it is highly recommended to have one present. It would also be an important reference to prevent disputes over profit, shares and capital issues.
Once you have all the necessary paperwork filed and processed, you can begin operations. It isn’t hard to get approved by the state to establish your LLC. All it takes is proper documentation and record keeping. This would also come in handy in maintaining the integrity of your company. Just make sure to keep everyone in your company updated on its status and clarify each person’s role in the LLC. It would also be wise to stay abreast of the developments in Limited Liability Company laws and statutes. Any changes may greatly affect how you can run your business and how it would profit in the future.