Six Basic Steps To Form LLC - How To Get EIN

WHAT IS LLC, HOW TO FORM LLC????

A limited liability company (LLC) is a legal status granted to businesses. An LLC is owned by one or more individuals who are referred to as "members." If you're the sole owner, it's a single-member LLC. More than one owner is known as a multi-member LLC.

TYPES OF LLCS

Domestic LLC

An LLC is referred to as a "domestic LLC" when it is conducting business in the state in which it was formed. Normally when we refer to an LLC we are actually referring to a domestic LLC.

Foreign LLC

When an existing LLC decides to open offices or have any other physical presence in a new state, it needs to register as a foreign LLC.

Series LLC

A Series LLC is a unique type of LLC where a single "parent" LLC provides limited liability protection across a series of "child" businesses (individual protected series). Currently available in 17 states.

HOW TO FORM AN LLC

Six Basic Steps to Start an LLC

Step 1: Select Your State

Step 2: Name Your LLC

Step 3: Choose a Registered Agent

Step 4: File the Articles of Organization

Step 5: Create an Operating Agreement

Step 6: Get an EIN

Select Your State

You can select a state by search all states rules and choose one You find best for your business,

Name Your LLC

The company name should follow the state guidelines in which the LLC will be formed. Also, the chosen name cannot already be an existing business name that's recorded and established.

Choose a Registered Agent

Your LLC may be required to have a registered agent, which is a person or company that handles any legal papers on behalf of the LLC if there is a lawsuit.

File articles of organization

File articles of organization with your local office for Secretary of State. The articles of organization might also be called a certificate of formation or certificate of organization. Articles of organization are essentially legal forms that outline basic information about the company, and each state may have specific requirements. However, most states usually require the following: the name and address of the LLC, a description of the general purpose of the LLC, a list of the owners, and the name and address of the registered agent.

Create an operating agreement

An operating agreement is an internal document that stipulates how the LLC will be run and how it will be managed. The operating agreement should include procedures for how members will be organized if more than one and how profits and losses will be divided between the members.

Get an EIN

An Employer Identification Number (EIN) is a number used by the US Internal Revenue Service (IRS) to identify and tax businesses. It is essentially a Social Security number for a business.

EINs are free when you apply directly with the IRS. via fax, or by mail.

How are LLCs taxed?

LLCs have the advantage of pass-through taxation. This means the LLC's profits pass through to its members, who pay taxes on their share of the earnings on their tax returns. Multi-member LLCs file an annual earnings report to the IRS using form 1065.

LLCS OFFER THESE BENEFITS TO SMALL BUSINESSES:

Limited liability protection

creditors cannot take or collect money from your assets to satisfy the debts of the business. Creditors are only able to seize assets from the company.

Pass-through taxation

An LLC's profits go directly to its owners, who then report their share of the profits on their individual tax returns. Hence, an LLC's gains are only taxed once. This is known as pass-through taxation.

Simplicity

Limited liability companies are relatively easy to form and maintain with little paperwork.

Flexibility

Flexibility in structure the ownership and management of an LLC: There are no limits to the number of owners, called members.

Tax options

LLC's also have tax benefits since the company's income, or losses are reported on the owner's tax return.

Access to business loans and credit

Once you have formed an LLC, your business can begin building a credit history. This will help your business access loans and lines of credit.