Limited Liability Company Information

I have been representing business owners for 15 years and helping them to start, structure and set up their businesses for success.

My clients have traditionally been successful, well-funded and often "serial" entrepreneurs who have the money to retain the services of an experienced attorney.

More importantly, the all have had the past experiences in building businesses to fully understand the need for intelligent business and legal planning. Some learned the hard way by making mistakes in the process.

While I have worked and helped hundreds of businesses, I soon realized that the great majority of small business owners do not use or cannot afford the services of a business lawyer.

In addition, I searched the Internet and found that useful, practical and trustworthy information is severely lacking when it comes to business planning topics.

No information resource can take the place of professionally tailored advice from a lawyer. However, when hiring a lawyer is impractical, it is important for an entrepreneur to make the investment to learn what is needed to form and operate their business properly.

One of the most important areas of business planning is choosing a proper business structure. For most small businesses, the limited liability company is the perfect choice as it provides liability protection, simplicity, tax choices, professionalism and a common structure for facilitating investment.

At the same time, the limited liability company offers flexibility to change and evolve as a business grows and becomes more complex.

This lens is designed to provide a general overview of the limited liability company with basic fundamental LLC information. I hope to add more lens with specific LLC topics in the near future.

An LLC stands for limited liability company and is a separate legal entity that is created under state law.

Separate means that the entity is its own person separate and apart from its owners. The benefit of this separation is that owners are not personally liable for the debts and obligations of the LLC business.

In today's litigious society, this LLC Protection is so important. Starting a business is a great endeavor but it is not worth risking everything you own. The LLC allows you to protect yourself and your assets.

The great thing about the limited liability company is that it does not require the owners or the business to meet the many formalities and requirements of corporations in order to obtain this liability protection.

LLC laws vary in each state but generally they were enacted to provide business owners with a best of breeed entity- all the advantages of corporations and partnerships but without the disadvantages of those same entities.

The LLC is a relatively new entity (Wyoming was the first state to enact an LLC statute in the 1970s) but do not let this concern you. The LLC offers the same liability protection as the corporation (which has been around for ages).

As a testament to the great advantages of the limited liability company, LLC formations have increased by over 90% in the past few years with no anticipated slow down. Plus, the number of LLC formations far exceed the # of incorporations each year.

State legislatures continue to improve their LLC laws to promote small business and provide small business owners with a legal vehicle that facilitated growth, success and protection.

The LLC Expert offers Free LLC Guide with more information about what is a llc and why it is such a useful business vehicle.

The LLC offers many benefits and advantages. Given the low cost to form a limited liability and the ease of maintaining one for your business, attorneys and accountants universally recommend that a limited liability entity such as an LLC be used for small business.

Five benefits of an LLC include:

Limited Liability Protection
Tax Choices and Tax Planning Opportunity
Operational Flexbility and Simplicity
Continuity of Business Features
Flexible Ownership Options

For more specific details about the
Benefits of an LLC or to access more detailed
LLC Information,visit the LLC Learning Center at The LLC Expert

Step 1: Finding an Available LLC Name

One of the most important LLC steps is coming up with a name that works for your business and is available for use in your state for formation as a limited liability company name. With all states, the name must not be the same as or too similar to another name being used in the state. Otherwise, the rules and limitations vary by state. Check with your state for details or take advantage of a FREE LLC NAME SEARCH (available in most states).

Step 2: Appointing a Registered Agent

Every LLC needs to appoint and maintain a legitimate registered agent in the state of formation. The registered agent is the official person or entity that can accept legal papers and other important documents delivered to the LLC.

Step 3: Determine State Required Document
Requirements to Forming an LLC Business

Each state has a different set of information that is required to be disclosed on properly formatted filing documents. Some states (like Delaware) require very little information while others (like Texas) require more disclosures.

The key is you want to disclose as little as possible in the formation documents as these are generally available to the public.

It is really important that you ensure a proper and complete formation with the state in order to preserve liability protection and other benefits of an LLC. While you can prepare and file these documents yourselves by visiting the relevant state websites and reviewing the LLC laws in your state, you should consider using a reputable and experienced formation service as it can save you time and stress and give you peace of mind.

For a FREE LLC GUIDE or NAME SEARCH and to gain more information about Forming an LLC Business, visit The LLC Expert's website at www.TheLLCExpert.com

In 1997, the Internal Revenue Service passed revolutionary IRS regulations which some feel is the reason the LLC is now the most common vehicle for small business.

The IRS passed the Check the Box rules which basically allows LLC owners to decide for themselves how they want their LLC business to be taxed. Before that time, there were complicated rules and tests that needed to be met which caused so much confusion.

Now, an LLC can choose a default tax structure or elect to be taxed under two other structures.

The default tax structure for a single member LLC is a disregarded entity status where the LLC business is taxed as a sole proprietorship for federal income tax purposes. No worries- you still get all the state benefits like liability protection.

If the LLC is a multi-member LLC, the default structure is partnership taxation which provides for a single later of taxation (pass through). This is beneficial to most small businesses who want to avoid the double taxation under the corporate tax structure.

Regardless of number of members, a limited liability company can elect to be taxed as a C corporation or an S corporation if these corporation structures are more beneficial to the business. There are time limitations for making the election and the S corporation election requires that certain conditions and limitations be met to qualify.

For an article with more details about Tax Choices for the LLC or to see commonly asked tax related questions and more in-depth LLC Information, visit The LLC Learning Center at www.TheLLCExpert.com