Whether you are doing a bit of casual research, or opening a company, here is what you need to know about LLC’s:
What an LLC is, and Is Not: LLC stands for Limited Liability Company, and it is one of four major business structures in the US which also include corporations, sole proprietorships and partnerships. An LLC has some of the benefits of corporations, while also retaining some of the freedom that the other business models have. Like corporations, LLC’s are designed to protect their owners from company debt and liability. This means that if the company fails or is sued, the owners are not personally liable. However, unlike corporations, which typically require a specific structure, LLC’s have freedom to structure their management to best serve their business interests.
LLC’s and Taxes: Another benefit of an LLC is the choice to be taxed as either a partnership or corporation. You can meet with a tax specialist and decide which option is best for your company. If you are starting an LLC or thinking of converting your company to an LLC, you’ll need to do a bit of paperwork. Fortunately, LLC online filing is an easy and relatively quick process.
What You Need to Know When Filing for a Business: You will need to file for an LLC status on a federal level for tax purposes. However, you may also need to file additional forms and meet qualifications in accordance to your specific business. To avoid issues, it is a good idea to first do the research on the specific requirements that would apply to your company.
LLC’s have a variety of benefits including lower startup costs and limited liability. If your company can qualify for LLC status, make sure that you give yourself plenty of time to file tax paperwork before the coming season.