The challenge of forming a “limited liability company” (LLC) may seem time consuming, costly and confusing. You dread the forms and red tape. Incorporating your business is important though - it protects your personal assets, ensures you comply with certain laws, and the business structure you choose could reduce your tax liabilities. Size doesn’t matter. LLC formation is vital in getting legal and tax protection for you as its owner.
Great question. The answer: MaxFilings’ 3-step LLC incorporation service.
Many new entrepreneurs we meet express concern about formally starting their LLC - and understandably so considering how intimidating the process of forming a limited liability company can be. Fortunately, MaxFilings takes the burden off you so you can focus on what you do best: building your business.
All it takes is three simple steps to form your LLC. Once you complete these steps, MaxFilings takes it from there. Here’s how it works:
Get started by choosing the state in which to form your LLC. Up-front pricing for three service levels (Basic, Standard and Max) will appear, and pricing includes the fees for both MaxFilings and your state.
Enter your information into the forms. Tips appear on the left of each form to help you complete it. The user-friendly systems lets you save your information in case you'd like to return and finish later.
Enter payment information to submit and process your order. Once payment has been received, MaxFilings will prepare and file the required forms for your state. Major credit cards accepted.
And voilá, you’ve formed an LLC! With MaxFilings, it’s that simple.
The Articles of Incorporation preparation and filing is completely handled by MaxFilings' LLC formation specialists who have years of experience starting limited liability companies in all 50 states and D.C. Our LLC formation specialists will also obtain your federal tax ID and perform a name check. We offer rush processing, if needed.
When starting a business, whether a one-person professional consulting service or an Internet-based store, there comes a time when every owner has to choose which type of structure works best. There are numerous types of business entities - sole proprietorships, partnerships, corporations (S corps or C corps), non-profits and limited liability companies (LLC) - each with different legal and tax structures.
Another great question. The answer: it depends. First, you'll need to consider the size of your business and assets. Start with these yes/no questions:
If you answered YES to any of the question above, you should definitely consider forming an LLC for your business. Here’s why:
Protection of LLC partners’ personal assets is one of the major advantages of a limited partnership.
Limited partners are not financially responsible for the debts, obligations and liabilities of the partnership.
Hate meetings? Unlike corporations, LLCs are not required to hold annual meeting or document minutes.
With LLCs, there is less paperwork and limited partnerships are easier to manage than most corporations.
Raising additional capital is typically much easier with LLCs due to the limited liability of limited partners.
Limited partnerships are not themselves taxed so partners can enjoy pass-through taxation as with other partnerships.
Though sometimes referred to as limited liability corporations, LLCs are very different from corporations; however, they do provide the same limited liability protection. If you are looking for the same limited liability as a corporation but without the formal structure and time-consuming ongoing requirements, an LLC’s flexibility and simplicity offer a distinct advantage over a corporation.
A: A limited liability company (LLC) is a type of business structure formed by filing Articles of Organization with the appropriate state. Unlike other entities, an operating agreement does not have to be filed even though it can serve as an important document stating the owner's’ rights and responsibilities, ownership share, voting rights, profit and loss sharing and distribution rights.
An LLC can decide to be taxed as a corporation or select the pass-through tax structure of an S corporation. Depending upon tax method chosen, an LLC operates just like a corporation but without the formal structure and annoying requirements.
Because LLCs are more flexible and easier to operate than most corporations, it has become a popular choice for many small businesses.
Here are some other highlights about LLCs:
A: Limited liability companies are owned by their members. An operating agreement sets forth the members’ rights and responsibilities. Unlike shareholders of a corporation, the share of ownership, voting rights, shares of profits and losses, and distribution rights of LLC members do not have to be based on their contribution amount to the business. Generally, an appointed individual or group of managers makes business decisions and runs day-to-day operations for the inactive members.
A: As a corporation provides a safe haven for its shareholder, so are members of a limited liability company not liable for the debts, obligations and liabilities of the business or for liability stemming from possible legal action. (An exception to this rule is when the LLC has recklessly harmed people or has been used to perpetuate a fraud.)
Typically, LLC members cannot lose more than the amount they invested in the company. So, for example, if the business goes bankrupt, the members will not be held accountable for its debts. Or if the company is sued and found liable, the court will not be able to take an LLC member’s personal assets (i.e. home, car, a bank account) to satisfy the debt. Protection of members’ personal assets is a major advantage of forming an LLC.
Other benefits of LLCs include:
An LLC can be managed by its members or by managers.
Members and managers normally enjoy the same limited liability as do the shareholders, directors and officers of a corporation and can lose no more than the amount of their contribution to the LLC.
Corporations, partnerships and trusts can be members of an LLC.
Most states permit the free transferability of interests in LLCs.
Most state statutes do not require any meetings of LLC members.
There are fewer required formal reports and less paperwork for LLCs than for corporations.
An LLC can choose to be taxed as a corporation or choose the pass through tax structure of an S Corporation.
Members of an LLC can be divided into as many classes as desired, without regard to their capital contribution and each class can have different voting rights, different shares of profits and losses, and different distribution rights.
Employees would frequently rather work for an LLC than for a sole proprietorship or partnership.
The general public normally thinks of LLCs as being more substantial than sole proprietorships and partnerships.
Continue reading: Should I form a Limited Liability Company (LLC)?
A: While the pros of forming an LLC typically outweigh the cons, there are a few disadvantages to choosing this type of incorporation entity. For starters, LLCs typically require more paperwork and documentation than sole proprietorships and partnerships do (though less than corporations). For example, official documents like the Articles of Organization or Certificate of Formation must be filed with the appropriate state in order to incorporate.
Also, state filing fees must be paid when forming a limited liability company - as with forming any other business entity.
A: No. LLC formation is mainly a clerical process. While it can be complicated, anyone who understands and follows the required procedures can form an LLC. At MaxFilings, we provide this formation service for substantially less than what an attorney would charge. Our 110% guarantee ensures the proper formation of an LLC.
That said, our service is not intended to serve as a substitute for professional advice. Depending on your individual situation and state statutes, you may need to seek more detailed counsel from local professionals who are familiar with your specific requirements as well as those of the state in question. Since taxes are a prime consideration when incorporating, we recommend consulting with your accountant or tax advisor.