FAQs
Frequently Ask Questions
If you were wondering?
First, LLC stands for Limited Liability Company. This entity is probably the most common of the business entities. It is exactly what it says, It limits your personal liability. It separates your personal assets from your company’s operations and legal damages if incurred. LLCs have the same taxation as sole proprietorships. The LLC’s income reports are in the owners’ personal income tax returns. LLC Owners, will pay income taxes & self-employment tax. LLCs are largely considered a more flexible option, because your state’s laws and regulations are not as strict than what is required for corporations.
Well the most important reason that most peolpe start and LLC is the protection against your personal assets being taking from you. An LLC provides what is know as a Corporate Veil, which means that you are separated and protected from your business’ operations, debts and liabilities. Another reason is that an LLC is considered more credible than an sole proprietorship, which means it’s easier building business credit and positions for business funding.
Because it’s free. No really, we will save you a lot of money and educate you at the same time. We don’t just tell you about how to, but DIYLLCNow simplifies the process, we literally shows you step-by-step how to form an LLC in all 50 states.
For those of you want the education, however you still want to use a third party professional to help you form your LLC, we’ve got you covered. Our partners are the best in class, they also provide the best customer experience and they are top rated professionals. We provide the best companies in their industries. With the data and tools that Business Setup 101 provides, you now have the knowledge know exactly what you need from these partners without being over sold.
A Registered agents in short, is a person or a business that receives and forwards service of process, legal documents, important state communications and official state administrative notices, such as annual report notifications on behalf of the business.
The Registered Agent in most states except Virginia is not required to provide any legal assistance, however some basic requirements in most states are:
– Resides or have an office in the state of formation.
– P.O. Boxes are not acceptable.
– Must be atleast 18 years old.
– The office must be open during normal business hours.
Yes. Many people are their own RA, keep in mind that if you plan to represent yourself as a RA and you plan to use your own address keep mind that this information will be public so your personal information will be public. We recommend this same advise if you plan to use your personal address and phone number when you form your LLC.
Well, it all depends on the state that you are forming it in. For instance the cost of forming your LLC in California will cost $800, however to form an LLC in Maryland is $99 and in Alaska the cost is $250. You can check our clikable map for your state LLC cost.
No. Your sole proprietor business is different from your LLC. Even if you decide to give them the same name. The LLC is separate from you, whereas the sole proprietor business is attached to you.
Maybe.
Deciding if an LLC structure is suitable for your business involves careful consideration of various factors. Firstly, assess the level of risk associated with your business activities. If your business operates in an industry prone to lawsuits or significant liabilities, such as construction or healthcare, forming an LLC can provide crucial limited liability protection. This shields your personal assets from being at risk in the event of business debts or legal claims, offering peace of mind and financial security. Additionally, consider the level of control you desire over the management of your business. With an LLC, you have the flexibility to choose between a member-managed structure, where all owners actively participate in management, or a manager-managed structure, where appointed managers handle day-to-day operations. This adaptability allows you to align the management style with your preferences and the needs of your business, fostering efficiency and autonomy.
Moreover, weigh the tax implications of choosing an LLC structure. By default, LLCs are treated as pass-through entities for tax purposes, meaning profits and losses flow through to the owners’ individual tax returns. This can result in tax simplicity and potentially lower overall tax liability, especially for small businesses and startups. However, you also have the option to elect corporate taxation for your LLC if it better aligns with your financial objectives. Consulting with a tax professional can help you understand the tax implications and determine the most advantageous tax treatment for your business. Ultimately, the decision to form an LLC should be based on a comprehensive assessment of legal, financial, and operational considerations to ensure the structure aligns with your business goals and priorities.
No. If you want to really do your due diligence in protecting your business from Name/Trademark Infringement, you should also search the U. S. Patent and Trademark Office’s (USPTO) Website to see if that name is available there also. Your states website is not connected to the USPTO. Which means that your business’ name may be available in your state, but may not be available on the federal level. Bottom line, you should absolutely check them both. This keep you from being sued and/or being restricted to doing business only in your state.
Yes, you don’t need an attorney you can absolutely file it yourself. Congratulations, you’re considering getting your LLC. Remember you’re not technically a business until you’re structed as a business.
This is why we are here to help you step-by-step, A to Z Do-It-Yourself. Forming an LLC is important and you want to ensure you do it accurately, however it’s not rocket science. When do know what you do know, no matter how simple, it can still be intimidating.
If you still feel a little uncertain after what we have provided we have provided some business formation services who will do it for you.
Yes you can, but be very carefull for a couple of reasons. Whatever address you use will be public record and because of this you’ll start getting tons and tons of mail advertisements, strange people will now have access to your home’s location. This is something to strongly consider especially if you are in the public light or a social media influencer. For your convenience Business Setup 100 has provided some companies who offer virtual office spaces.
Another consideration is business funding. When you apply for funding or a credit card, finacial institutions will check your phone number to see if it’s a business number They will definitely check the address that’s on file for your business to ensure it’s an actual physical commercial location, they have their ways of checking. It is in their best interest to do their due diligence to ensure your business is credible and an legitimate business establishement.
If you lack having a physical commercial space, then getting a virtual office is a smart idea. One very important thing to consider when getting virtual office is not getting a P.O. Box, FedEX, UPS or similiar shops. You want the space to be an actual office or commercial building. This will be up to you to figure it out. One tip is to just google the address to ensure its an actual office or building. In many cases you will be denied funding if you have a PO. Box, FedEx, UPS, etc….
Another good idea is to have virtual office that will notify, forward or at least send you an image of your mail when it comes in.
No, this is not neccessary. Although it could be used as a legal document for determining percentages, right and responsibilities, it should be maintained by you for your records.
You can use this document to help to dictate operations and bylaws internally for your business.
You should definitely have an operating agreement if you have a multi-memeber LLC. Another thing is to have this document drafted up by an attorney or paralegal.
Immediately. Whenever you start a business – even if it’s a sole proprietorship you should always have a business bank account that’s separate from your personal accounts.
When discussing an LLC though, most banks will require your EIN, Articles of Organization and some will even ask for a copy of your operating agreement to open a business bank account.
You don’t need an attorney to form an LLC. However, for more complex LLCs or if you are unsure of what you are doing, consulting an attorney would be wise. It is also good practice and recommended to build a relationship with a business or corporate attorney who can give you advise and good counsel concerning your business.
Yes, however let’s slow the conversation down a little. There is something called Piercing Corporate Veil. This means that you have violated certain corporate boundaries, which could make you liable of being seen as the same as your business. Here are some things that could be considered as Piercing the Corporate Veil:
- The LLC was created as a shell or a vehicle of Fraud.
- The use of the company’s assets as if they were the individual’s assets. This is know as Co-mingling or Intertwinement.
- The violation of corporate formalities. For example, your business should have an operating agreement which outlines the operating structure of your business. It is imperative that you follow those guidelines as best as possible. If you egregiously violate those standards, it can be considered as Piercing the Corporate Veil and make you personally liable for your LLC’s legal damages.
Absolutely. If you don’t pay your annual filing fees when they are due your business will be considered non-compliant or “Not in Good Standings” with your state. In many cases this will automatically disqualify you from things like obtaining funding and/or denial of government contracts. The worst is to miss out on funding that your business was approved for, because you didn’t pay your annual filing fees.
