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LLC (Limited Liability Company) Filing
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What is an LLC?
An LLC or Limited Liability Company is a state governed entity that acts like a hybrid between a corporation and partnership. LLC's are very easy to maintain and for
this reason, they have become the most popular entity structure to file in recent years because:
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Owners are generally not responsible for company debts and are not required to be U.S. Citizens.
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No annual meeting or meeting minutes are required.
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They do not issue stock.
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Offer a pass through taxation treatment.
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No double taxation.
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In order to file a Limited Liability Company, Articles of Organization need to be filed with the Secretary of State and filing fees need to be paid. Once the state approves the LLC,
it can then legally conduct business.
Here at DoMyLLC our trained LLC specialists understand the needs of small businesses and are dedicated to providing excellent customer service. Forming an LLC with DoMyLLC takes 15 minutes of your time.
Simply place an order and provide a signature if needed. We make it that easy to DO.
Ownership of an LLC
The owners of an LLC are called “members” and the members own the company based on their contribution to the company. For example:
Kohen and Reaghan decide to open up a trucking company. Kohen is going to be driving the truck and hauling the goods while Reaghan is going to run the day to day activity of the
business. Kohen owns a big rig valued at $40,000 that he is going to put in the business and Reaghan is going to contribute $50,000 cash giving then an initial contribution amount
of 90,000. To find out the percentage of ownership use the equation below:
Member Contribution / Total Contribution = Percentage of Ownership
Kohen’s Ownership Percentage – 40,000 / 90,000 = 0.444 which is 44.4%
Reaghan’s Ownership Percentage – 50,000 / 90,000 = 0.666 which is 66.6%
If the two members decided to the sell the company and received $750.000, Kohen would get 354,000 and Reaghan would get 396,000.
LLC Maintenance
With nominal maintenance requirements an LLC offers the asset protection of a corporation with the flexibility of a sole proprietorship or partnership. Although the company is not required to hold annual
meetings or record minutes like a corporation it offers the same asset protection. Owners of an LLC are not responsible for the debts of the company.
There are no internal formalities in an LLC, however the company is required to complete state annual report requirements and file taxes.
LLC Taxation
One of the many benefits of filing an LLC is the flexibility in which the company can elect to file taxes. An LLC has default taxation; however it can elect a different tax status.
The taxation of an LLC is as follows:
Default Taxation – single member LLC's are considered a disregarded entity by the IRS and are taxed like a sole proprietor. Multiple member LLC's are taxed like a partnership.
Corporation Taxation – An LLC can file Form 8832 and be taxed like a C-Corporation (Not very common).
S-Corporation taxation – The IRS now allows for LLC to elect S-Corporation status. This allows the LLC the tax benefits of an S-Corporation with out the corporate formalities of a Corporation.
** Before making any taxation elections please make sure you speak with an accountant.
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Packages starting at $99
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For more information on how we can help file an LLC for your company please call our office toll free at (888)-DoMyLLC (366-9552).
ORDER NOW!
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