When you start a small business, you need protection from business risks that may occur in the future that could threaten your personal assets. An LLC ownership agreement will give you the protection you need as it offers owners limited personal liability for the debts and actions of the LLC. Your personal assets are insulated from business risks unless you cause personal injury upon someone or engage in an illegal or fraudulent activity.
Forming an LLC ownership agreement offers the limited liability protection of a corporation with the management flexibility and pass through taxation of a sole proprietorship or partnership.
LLC Ownership Agreement Low Maintenance To Run
After you have prepared the limited liability forms, registered with the state, and paid any fees (some states may charge a yearly fee), an LLC when compared to running other business structures offers a minimal amount of paperwork and maintenance to run.
A limited liability company is attractive to small businesses in its management flexibility when compared to running a corporation in not having to file yearly reports or minutes of corporate meetings. More effort can be put into making the business a success than spending time on non-productive paperwork.
LLC Ownership Not Taxed Separately
An LLC is not taxed as a separate entity like a corporation is. An LLC offers simple tax preparation as all income and expenses are figured into the owner’s personal tax returns. Even though you have the option at any time to have the business file its own taxes as a separate entity, careful consideration should be taken to see if there would be any advantage in implementing double taxation in your LLC like in a corporation.
A limited liability company is legal in all 50 states today with yourself being the only legal owner and can have just yourself as the only employee.
Forming an LLC offers your personal assets protection against business debts and claims. Only the assets of the business are at risk. You can save time and money and prepare your own limited liability company forms without the use of a lawyer as the paperwork in not technical.
Create a Limited Liability Company (LLC) quickly and easily using US Legal LLC Application Software! A detailed list of considerations for creating an LLC are presented first. Then use the most up-to-date state-specific forms available to create a legal and valid Limited Liability Company! Finally, a template for developing the LLC’s Operating Agreement finishes the process. Legal and valid in all 50 states.
More On LLC And Taxes
An LLC with one person is considered a sole proprietor and you must report all finances of the LLC with your tax return. In this case, the LLC does not pay taxes, only the sole proprietor. Owners of an LLC are called members.
The profits are passed through to the members of the LLC. Profits of the business are profits of the members and they file them on their own income tax returns.
Benefits Of Having A Limited Liability Company Entity
You are protected from personal liability from any missteps by either you, other owners or your employees. An LLC is a separate legal entity with flexible taxation, obviously limited liability and easier to operate. Your personal assets are secure if the company runs into trouble.
Members of an LLC are exempt from personal liability for any business debts and obligations.
Is My Business Name Protected With An LLC?
Your business name is protected in your state and no other business in your state can form an LLC or corporation with your name. But a sole proprietor or a partnership can use your name.
LLC Ownership Agreements Additions
The Articles of Organization forms outlines the structure of the LLC relevant to the public registration. Annual meetings are required to go over any changes or decisions regarding financial changes.
