When asked what is an LLC one answer is that it’s a business entity known as a limited liability company. The structure of a limited liability company is made up of one or more members who can be of any other legal partnerships or business enterprise.Many companies start doing business as state registered style entities then convert to being a limited liability type of company as they continue to grow and develop. One reason to convert business types over to a limited liability company is that its members would have limited liability for the entity's debts and obligations. Another advantage is that taxation as a limited liability company members can elect to be taxed as a sole proprietor, partnership, S-corporation or corporation, and as so providing much more tax flexibility. It may be wise to find a CPA for some help with any llc taxes.
How to form an llc as a legal business entity and as a state registered limited liability company requires an article of organization. This article has to be filled out and then filed with one’s secretary of state office. Each state’s guidelines must be followed along with all application fees paid in advance.
Common-Business-Sense can be why many companies prefer to find a lawyer to help with the preparations of this article of organization. A good example of why it is wise to use a lawyer is that not all states will tax partnerships but do tax limited liability companies. Some states do require that a formal notice be released and published in a local newspaper when a limited liability company has been established or event that has been registered with the state. One extra tip is incorporating a business as a Delaware llc.
Some disadvantages of a limited liability companies is it can not live for ever and will dissolve when its members die. Limited liability companies can not take their company public with a stock offering to raise capital.