You’ve probably heard the phrase “LLC” before, and may know that it means some type of business, but if you want more details, here’s a breakdown of what is an LLC:
What is an LLC?
LLC stands for Limited Liability Company. It’s a legal business structure that shields your personal assets from being taken in a law-suit. Essentially, it separates your personal and business finances to ensure that even if your business fails, your personal assets won’t be harmed as much. There are many examples of famous companies that are LLC’s.
Who Owns an LLC?
Owners of LLC’s are called members. There can be single-member LLC’s (one owner) of multi-member LLC’s (multiple owners). On your LLC Articles of Organization (The document filed with the Secretary of State office to create your LLC) you will see members of the LLC.
Why Form an LLC?
The main reason is to protect your personal assets. LLC’s are a shield between your personal assets (home, banks, investments, jewelry, etc.) and your business assets. Say for instance your company owed lots of money to a creditor; that creditor would not be able to seize or repossess any of the personal assets listed above.
Why Form an LLC instead of a Corporation?
LLC’s don’t have to elect a board of directors
LLC’s are able to distribute profits however they want
LLC’s do not need to have board meeting, or keep record of all meetings
LLC’s don’t have to pay double taxation like corporations
In Summary, LLC’s are a much more flexible business option than a corporation
How Much does an LLC Cost?
LLCs are relatively cheap compared to other forms of businesses. There’s a 1 time filing fee to pay your state, and then an annual fee that’s sometimes called a ‘franchise tax’ to allow your LLC to continue to operate.
How Much Work is running an LLC?
LLC’s are relatively low maintenance to operate. Once your filing fee is paid, you’ll have to pay your Annual Report and annual fee’s to the state once a year.
If You want to change your address or name, there’s simple forms to submit, nothing complicated!
Now that you known everything on what an LLC is, let Doola create your LLC for you! Don’t get bogged down in paperwork when you should be running and expanding your business! Check out our LLC formation packages here.