LLC FAQ
What are the benefits of forming an LLC?
Forming a limited liability company offers the simplest way of protecting the personal assets of its members from creditors. They are the easiest to form and manage. The taxation of LLCs is also attractive as an LLC’s profits are taxed at member level only and is not subject to the double taxation that corporations are.
What does LLC stand for?
LLC stands for Limited Liability Company, which is descriptive of its purpose: limiting any liability to the company and not its members.
Are LLCs required to have a Registered Agent?
Most states require that an LLC have a registered agent, but even if the state you are forming your LLC in doesn’t require one, having one is highly recommended to ensure that the LLC receives all important documents and filings to keep it in good standing and to avoid penalties.
Do LLCs require a certain number of people to be formed?
No. Many LLCs are formed by just one person as the sole member.
Is forming an LLC difficult?
Not at all. After choosing a name, only a few documents are necessary, such as the articles of organization and paying a filing fee. An operating agreement will also need to be created and any necessary licenses or permits need to be an obtained.
Can a non-U.S. citizen be a member of an LLC?
Yes. This is one of the differences between an LLC and an S Corp as S Corps as LLC members can be non-U.S. citizens.
Are LLCs required to have a Federal Tax ID Number (FEIN)?
If the LLC has more than one member, then it will be required to obtain a FEIN. If the LLC only has one member, than the social security number of the individual can be used for taxation purposes for the LLC.
Is a partnership the same as an LLC?
No. There is no limited liability protection in a partnership. Also, partnerships generally do not have any required filings in order to form a partnership for their business.
How long can an LLC operate?
LLCs can either have an expiration date specified in its articles of organization or they can operate indefinitely. Its up to the members of the LLC how long it goes on for.
