One of the benefits of forming a business LLC is that in most states, the owners of the business are not a matter of public record.

This is not the case in all states. Some state do require that members of an LLC be disclosed and in some cases their addresses must also be listed. You need to check with your state formation requirements to be sure.

For those states that do offer privacy, there are still some pitfalls to losing privacy. For one, every state requires that an LLC have a registered agent who is listed and shows name and address is available as a matter of public record.

Some owners choose to serve as the registered agent and this results in their name and address being associated with the business LLC. If you want to be kept private, you can purchase registered agent services and have a company and its office address serve this role.

Using a registered agent service will keep your name from being publicly associated with your LLC. Just be sure you choose a reputable registered agent as this role is vital to your LLC and your legal protection. CLICK HERE FOR A TOP REGISTERED AGENT SERVICE PROVIDER

Some business owners mistakenly think that if their home state requires owner disclosure, they can avoid this disclosure by forming their limited liability company in another state.  This may be the case initially with the formation filing.

However, if your business is going to be operated in your home state or will have any business activity in that state, the LLC will need to registered in your home state and foreign LLC registration usually has the same disclosure requirements as domiciled LLC.  You may find yourself paying for two registrations and annual maintenance fees without any privacy in the end.

Click Here and Visit The LLC Learning Center for more LLC information

If you are looking for the right incorporation service to form your LLC, you have found out that there are hundreds of them available on the Internet.  How do you know which one is right for you?

Here is a short list of must haves in order to avoid making the wrong choice. Choosing an incompetent or unscrupulous provider can result not only in long delays and extra cost but potentially an improper legal entity which places your liability at risk.

1. Filing Experience. While forming an LLC is an administrative process, it does require knowledge of the latest formation laws in each state and the intricacies of working with the state agency.  These things can change every year as LLC statute amends are passed and as regulatory agencies change their own rules and processes.

Unfortunately, there are too many purported incorporation services out there that put up a fancy website but have no experience in this area.  The best way to confirm experience is to look up the company with BBB (Better Business Bureau) and review any customer commentary.

2. Guarantee. One of the best indicators of a professional LLC incorporation company is one who backs its services with a real guarantee.  The most effective guarantee is one that certifies that the formation of your LLC will be in compliance with state requirements.  Also, having a satisfaction guarantee is a plus.

3. LLC Knowledge. Forming LLCs involves an ever changing process which can vary based on state.  Look for indications that your chosen incorporate LLC provider has the resources and the commitment to be able to keep up with the knowledge required to provide this service effectively.

4. Customer Support. While incorporation companies are not allowed to offer legal advice, they should have knowledgeable staff available to their customers to help with your general questions and concerns. Always look for a customer support phone number and online answers and articles as evidence.

5. Insist on a US Based Company and Avoid Resellers. Believe it or not, there are some companies selling US LLC formation services that have their fulfillment staff in other countries such as India.  And, many online formation companies merely resell the service and outsource the actual work to another company.  While this is difficult to ascertain from a website, these structures are signs to stay away.

In these cases, there is no real accountability and you want to be dealing with the people who are actually forming your LLC.

In summary, insist on using the most reputable LLC formation companies.  Having a properly formed LLC is so important to starting your business the right way and preserving liability.

RECOMMENDATIONS:

The LLC Expert is based on uncompromising knowledge and experience in LLC formation and LLC governance.  The staff is subject to onerous training and customer support is second to none.  Plus, they specialize in providing one of the fastest turnaround times in the market for their pricing. And have both a compliance and satisfaction guarantee.  Click Here to learn more about The LLC Expert’s LLC formation services.

Yes, the author of this post is biased as this database in sponsored by The LLC Expert.  So, here is another top rate LLC formation company to consider.

One of the preeminent online LLC formation providers is a company called Business Filings.  In terms of experience and longevity Business Filings has been providing LLC and incorporation services longer than most any provider.

In fact, its sister company is the #1 provider of incorporation and governance services to the largest law firms and corporate legal departments in the country.  As a result, by going with this company, you are choosing the best in the business- backed by customer support and a compliance guarantee.  Click Here to get $15 Off BizFilings most LLC Formation Packages

A common area of LLC questions arises from business owners who are currently operating a business as a sole proprietorship but now want to move the business into an LLC.

This is the best thing you can do for yourself and your business because as a sole proprietor, you are totally and completely at risk personally for any business obligation, business problem or lawsuit.

Starting a LLC for an existing business is not always an easy process and the longer you have in business and the more assets, contracts and operations you have the more onerous it is.

Having said that, the longer you wait, the more complex it will be so the earlier you can get the process started the better.

FORM AN LLC IN YOUR STATE

First you need to form an LLC in your state of primary operations.  This consists of preparing a legal filing with your state agency that complies with the LLC formation requirements in your state.

After your LLC is formed, it is a new entity that only exists from the formation date given to it by the state agency.

OBTAIN ALL REGISTRATIONS AND PERMITS FOR YOUR NEW LLC

After formation, you will need to get an EIN# for your new LLC and register it with the state tax department and obtain any other licenses you need to operate your business. These would be the same ones you have under your current business only now you need to obtain them in the name of your new LLC.

In some instances, you may be able to transfer your existing licenses to the LLC.  Check with each agency responsible for issuing the license/permit to see if this is possible.

OPEN A NEW BANK ACCOUNT IN THE NAME OF YOUR NEW LLC

Once you obtain an EIN# for your new LLC, you will want to open a bank account for your new LLC.  You should consider using the same bank where you have your existing sole proprietor accounts but do not close those accounts just yet.

There will be a transition period where you will need to conduct banking transactions still with your old business while things are moving into the new LLC business.

TRANSFER ASSETS FROM OLD BUSINESS TO NEW LLC BUSINESS

At this point of starting a LLC, you have a new legal entity and all the requirements to operate.  Now, you will need to transfer the existing business assets to the new LLC.  You may still want to keep some money in the old bank account to cover transitionary issues.

If your business has a lot of assets, you may want to consult an attorney to help you with this.  Generally, all personal property (including money) is transferred using a document called a Bill of Sale.  Real Estate requires a deed recorded in the county where the real estate is located.  Intellectual property (like domain names, trademarks, etc.) is transferred using an Assignment document.

TRANSFER CONTRACTS AND TRANSITION BUSINESS RELATIONSHIPS

This step is where it can be a hassle but not always.  If your old business is a party to contracts that are still active and required for business, you will want to assign those contracts from you(your old business) to your new LLC.

You will need to see if that can be done without the approval of the other party.  If not, you will need to call and get written approval before assigning the contracts.

Also, you may have established business relatioships and accounts with other parties such as vendors, suppliers, partners, etc.  The best thing you can do here is to call them up, tell them you are transitioning your business to an LLC and discuss with them how to properly have the LLC take the place of your existing business and relationships.

Document everything that was agreed upon.

KEEP EXISTING BUSINESS STRUCTURE IN PLACE FOR AWHILE UNTIL BUSINESS IS RUNNING 100% THROUGH NEW LLC

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It is not easy to do the transition, but the sooner you do it, the faster you will get the protection and other benefits of operating a business through a limited liability company.

It is important to know that you do not get this protection for existing business liability and for anything that may come up later related to the business activity conducted prior to the LLC being formed.

IS STARTS WITH LLC FORMATION –

The best and fastest method to get a proper LLC in place is to retain the services of a reputable LLC formation services provider. You can click here for more information about  The LLC Expert’s LLC formation services or click on this button for a $15 discount from one of the top providers of LLC formation services.

If you are planning on starting a small business, your business planning should involve not just business, finance and marketing but also protection and liability protection planning.

Small business lawsuits are on the rise and business owners need the liability protection afforded by LLC incorporations more than ever. It is risky to start a business. You now only will be investing your time and your money into a new endeavor but you are also going to be making decisions, entering into contracts and transacting and interacting with a myriad of other people and business entities.

The last thing you want to do is subject yourself to incredible personal liability by operating the business directly. This direct structure is known as a sole proprietorship and it leaves its owners 100% at risk for potentially large liabilities.

The LLC was created specifically to cater to small businesses. State legislatures made them relatively straightforward to form and easier to maintain and operate.

Do not risk your own liability and loss of your personal assets. Complete the LLC incorporation process prior to conducting in any business activity.

This question is very open ended. Most people will register an LLC to create a legal entity for operating a business. The LLC registration is the most important step but it is only the first step.

LLC registration involves preparing and submitting a legally compliant filing with the state agency in the state where you want your LLC to be formed. Once the state processes the LLC, your LLC legal entity is in existence.

However, at that point, it is merely a shell entity. It is up to you to give the LLC owners and provide it with its own set of rules and governance procedures. This is typically done by executing and adopting an LLC operating agreement which acts as an owner and user manual for the LLC business.

After taking care of the LLC structure, a new business also should complete other required registrations such as obtaining federal and state tax identification numbers and obtaining a business license at the local level.

Depending on your business, there may be other licenses and permits required (for example a sales tax license if you are selling goods or a professional license if your business activity is regulated by another agency.

The LLC registration is important because it creates the vehicle for your business and so you need to be sure it is done properly.  Visit The LLC Expert for more information about LLC Formation. , After formation, remember that running a business involves a myriad of other ongoing requirements, processes and activity.

In order to form an LLC, an LLC registration filing needs to be made with the state agency that handles legal entities.  This is usually the Secretary of State for most states but a few states use a different agency name.

An LLC Registration usually consists of  a set of documents which contain the required disclosures by the state.  In addition, an appropriate fee must be made.

Once an LLC has been formed, it is authorized to conduct business in its state of formation.  But, in order to conduct business in other states, that LLC must also complete an LLC registration in such other states.

Each state imposes it own set of rules and requirements for what must be done in order for an LLC to register and do business in the state.  Once registered, it can conduct business in other states but the LLC retains the citizenship of its original state of formation.

The process for how to start an LLC depends on your state of formation.

But in every case, you must know that a limited liability company does not exist until the processing for its formation has been fully completed and processed by the state agency responsible for forming LLCs.

The only way to know if one has been completed is when the state shows the existence of your LLC in its records. It is important that you not engage in any business until the LLC is formed as formation is a prerequisite to gaining the benefit of limited liability protection provided by the legal entity.

Now, how to start an LLC. Each state has its own set of rules and requirements which must go into a filing made to the state. First, there are name rules which govern what kind of name you can give your LLC. You can look these up in the laws or just call your state agency and have them check whether your desired name is acceptable.

Second, there is a registered agent requirement. Every LLC is required to have a registered agent appointed. Each state has its own set of registered agent rules. These can be found in the state’s LLC laws.

Third, there will be a set of disclosure requirements which vary from state to state. Some states require very little information while others have some onerous disclosures. For example, Texas requires that all members and their addresses be listed for member managed Texas LLC entities. These requirements are found in the organization provisions of the LLC laws.

Fourth, you need to determine processing times and the proper filing fee. Always, always, always understand the processing times for your filing. In states like California and Delaware, a normal filing will take more than 6 weeks! This is not acceptable for most people who want to start an LLC for a business.

The good news is that those states as well as most other states offer an expedited process for additional fees in which your LLC can be formed in a week or even a day if the proper fee is paid.

As step 4, determine what processing time you need and the fees to be paid. Also, make sure you find out exactly who you need to write the check out to. This can prevent your filing from being rejected and delayed.

Fifth, prepare and submit your filing. Once processed, your LLC has been formed and started.

At this point you have a shell LLC. So, you need to provide it with its own rules and create members and a management structure. This is typically done with a written LLC Operating Agreement.

Finally, you will want to obtain federal and state tax ID numbers for your new LLC.

Because there are so many variations and intricacies imposed by each state, the best approach is to hire a reputable LLC filing service to handle it for you.

The LLC Expert offers LLC formation services in some states (go to our Form an LLC page.

The LLC Expert also recommends one of the largest LLC formation providers- a company that handles this for many of the large corporate law firms and corporate legal departments in the country. CLICK HERE TO GET $15 OFF.

Florida is the state that forms the most limited liability companies over any other state.  This is a combination of Florida being a tax friendly, an asset protection friendly state, a pro business state, and one with lots of real estate activity (an LLC is the ideal vehicle for holding, developing, and/or renting property).

The Florida Limited Liability Company Act is also one of the first to be adopted in the US.  It has been constantly improved throughout the years.

Florida LLC Formation requires that a filing be prepared and submitted with the Department of State.  The filing must contain certain statutorily required information.  A Florida resident registered agent is also required to be appoint and continuously maintained.

The LLC Expert has a special Florida division dedicated to providing services for forming an  LLC in Florida.  Visit us where you can get Florida specific LLC information: http://www.FloridaLLCFormation.com

Florida forms more limited liability company entities than any other state.  This is a combination of the state being very business, tax and asset protection friendly.

Florida was one of the earlier states to adopt a Limited Liability Company Act back in 1982 and since then, the Florida legislature has made several major changes to the laws to make it even more beneficial for business owners to operate through this type of legal entity.

It is quite inexpensive to form and maintain a Florida LLC.  Current filing fees to get one formed on an expedited basis are around $130 and annual fees are less than $100 a year if paid on time.

The LLC Expert has been very active in forming Florida limited liability companies and recently set up a specialized Florida expert division to focus on servicing our Florida customers and keeping up to date with the rules and processes in the state.

We also have a Florida specific website where you can access Florida articles and learn more about Florida LLC Formation and services to form one in 3 Business Days- stress free, hassle free and guaranteed.

If you have not seen the press lately, there have been many articles discussing a wave of entrepreneurship by necessity.  Many educated and experienced men and women are finding that in this job market, it may be easier to set up their own business to create a level of income for themselves.

Because a limited liability company is so inexpensive and relatively straightforward to form and maintain, the costs to start a business can be very low.  And the rewards can be significant. While these people start to think about this by necessity, many are finding a true blessing in this activity.

We have customers who are already replacing their old income with consulting and services based businesses. Others are writing in raving about their increased fulfillment in doing something they really have passion for.

Many are still employed but well aware of the insecurity of the market.  They are creating LLC businesses as a part time endeavor to add another income stream and a financial cushion in the even they later lose their jobs.

For more information on LLC formation, which is the first step to starting a business, visit our LLC Learning Center.

We get questions all the time asking about the quality of various incorporation services (including LLC formation) available to business owners.  A recent inquiry asked about BizFilings which is one of the leading LLC formation services on the Internet.

While I do not generally provide reviews in this LLC Answers blog, BizFilings is one company that I can endorse based on my actual knowledge and relationships with the company.

First, it has been around much longer than most online businesses.  It was started in 1996 and was purchased by Wolter Kluwer, a billion dollar legal services and publications company serving the law firm and attorney market.

BizFilings has remained a separately run company focused on providing incorporation services and other related products to small business owners.  They have their owner management team and a staff of extremely well trained customer service representatives to help any new business owner through this process.

GO TO BIZFILINGS NOW

When it comes to competency and legal compliance, BizFilings offers a compliance guarantee.  However, you can gain even more confidence in their service because its sister company, CT Corporation, also owned by Wolter, is the primary service provider of incorporation services, registered agent and other governance services to the nations largest law firms and in-house corporate legal department.

BizFilings has really become the business of choice for legal entity formations because they have combined the entrepreneurial spirit and customer focused obsession of the original BizFilings with the unparalleled corporate legal expertise and experience of Wolter Kluwer and CT Corporation.

If there is anything you should insist upon when starting a new business, it is ensuring that you have a proper and compliant incorporation or LLC formation.  It is the legal entity that provides you with liability protection and in order for a corporation or LLC to exist, it must be completely and properly organized. So, make sure you entrust this requirement to a competent lawyer or incorporation service.

While I had a lot of interaction with CT Corporation when I worked at large law firms and served as General Counsel for two companies, I also have worked with BizFilings management and have been extremely impressed with their pulse on small business and the quality of their small business services.

BizFilings offers several package levels so check the details and inquire about turnaround times to make sure you get the right one for your needs.

Self-employment tax is owed on income generated by owners of a business.  Under the Internal Revenue Code, owners of sole proprietorships and limited liability companies under the default LLC tax rules pay self employment taxes resulting from the income generated by the business.

There is a maximum amount of income for this tax so when income reaches a certain point, then self-employment taxes will not longer be owed on the excess income. So, if your business intentions are to make more than $120,000 or so a year, it may not be worth planning for self-employment taxes and just focusing on making more revenue.  Overall, the single layer of income taxation is worth paying the self employment taxes for the initial stage of income.

The above rules apply to an LLC which is being taxed pursuant to its default tax structure which is a pass through structure.  However, after forming an LLC for a business, the limited liability company has the option of electing to be taxed as an S corporation or a C corporation.

Under an S corporation tax structure, business owners can be employed by the LLC and only the salary paid to the owner will be subject to employment taxes.  Excess profits distributions are not subject to self-employment taxes.  Now, the IRS does require that a reasonable salary be paid and they are quite strict about ensuring that this rule is not abused by business owners.  For example, if you are the sole owner of an LLC and provide consulting services which are paid by the hour, it will be hard to justify that your salary should be significantly less than the income generated by your services directly.

On the other hand, if your LLC business is selli g a product and you have assets of value and/or other contractors and employees, then your salary will not be based on the actual revenue generated.

Accordingly, it is important that you seek the advice of your accountant or tax attorney to ensure that based on your business activity and situation, this kind of structure may be acceptable for reducing overall self employment taxes generated by your LLC business.

Similarly, with a C corporation tax structures, employment taxes are only paid with respect to salaries paid out to owners of a business (this applies to any employees of the business).  However, an LLC business taxed under the C corporation tax structure is subject to double taxation when it comes to income taxation so there is a possibility that any employment taxes saved may be spent on income taxes.  Again, check with your accountant or lawyer to determine what tax structure is best for your particular situation.

Virginia is one of those states that have more strict requirements when it comes to registered agent qualification than most other states.

In Virginia, if the registered agent is an individual, he or she must be a member of a member-managed Virginia LLC or a manager of a manager managed limited liability company.  Or, the person can be a Virginia licensed lawyer.  In addition, the registered agent’s address must be a physical address locate in Virginia where service of process papers can be accepted during business hours.

There are some additional options if you have a legal entity as the registered agent of your LLC in Virginia.  Here, the entity must be formed in Virginia or properly registered in Virginia.  Same rules regarding physical address and availability apply.

Many LLC business owners choose to use a registered agent service for privacy reasons because the registered agent name and address is a matter of public record.  You can purchase LLC registered agent service for an affordable annual fee.

In New York, there is a publication requirement after forming a New York LLC.  This extra step is not favored by small business and it is unclear what real purpose it serves.  The publication requirement usually requires payments to newspapers which can be significant depending on where your LLC business is located.

After your New York limited liability company has been formed by the state and you received a filing receipt, you need to contact the local county or city where the principal office of the LLC is located.  That locality will provide you with the names of two newspapers where you will need to publish a notice of the existence of your LLC.

These publications are used to handling these notices so most of them will provide you with a form you can use to prepare the notice for your LLC.  After the publication has been completed and it has run for the specified period of time, you will receive an affidavit of publication from each newspaper.

At this point, you will need to prepare and make a simple filing with the New York Department of State (called a Certificate of Publication) and send it along with the affidavits.  Call the Department for details on the latest form and process for sending in this final filing.

While the costs to meet this publication requirement greatly increases the costs to use a New York limited liability company, the benefits of limited liability protection and tax choices still make the LLC entity a popular choice for small business owners.

The beginning of a new year is the most popular time to start a business.  As a result, the state agencies that handle LLC formation processing are very busy and in many states, the processing times increase greatly.

So, if you are going to start a new business, get your LLC filing completed and filed with your state.  It is really important that your limited liability company be formed prior to conducting business.  This is necessary to ensuring you have complete LLC protection offered by this legal entity.

Many motivated business owners get frustrated this time of year when they find out they need to wait 4-6 weeks for their legal entity to be organized.  Make sure that prior to purchasing an LLC formation service, ask the company about the turnaround times for the package you are buying.  Second, may sure you choose a reputable company that will form your LLC in compliance with state requirements.

New business is a great way to start a new year and to begin a journey to financial freedom but it is important you build a proper asset protection foundation with an LLC before starting your business activity.

VIDEO LIBRARY

Yes, there is nothing in the law that requires that an LLC be formed by a lawyer or other service.  A business owner can form an LLC on their own by learning about and following the legal requirements and processes required to process an LLC registration.

View the video below for steps and guidelines on how to go about doing this.  Plan on spending about 3 to 5 hours to handle this properly.  If you want to save time, The LLC Expert’s formation service only requires about 5 minutes of your time and is backed by a guarantee of compliance with your state’s LLC requirements.  Information on LLC Formation Services.

VIDEO LIBRARY

It is that time of year when many aspiring business owners find the energy and courage to take the official step of new business ownership. This is a great time to start a business not only because of strong motivation but because it is an ideal setting to start the new year by going down the path to financial freedom.

One of the first steps is to form an LLC and so if you are looking and shopping around for the right online llc formation services company, please watch this video as it will eliminate 90% of problems and issues faced by first time business owners when choosing the right company to form their limited liability companies.

When it comes to actually “signing” llc formation documents required to form a limited liability company in a state, the laws generally do not require that a member (owner) sign the filing documents.  The laws do require that an ORGANIZER sign it.  So a person must sign it but that person can be an owner, a lawyer, a document filing services company agent or anyone you desire to sign them as long as it is an actual person.

Now, this question also raises another issue because I assume it is being driven by the desire for the owner of a business to keep his or her ownership private. One of the benefits of having a limited liability company in MOST states is that owners of the LLC business are not a matter of public record.

This is important to some owners.  First, there may be private investors and these investors do not want to be disclosed as related to a business.  Second, there are just silent partners of a business.  Third there are active member managers who just do not want their ownership to be disclosed as a matter of public record.

In many states, members are not required to be disclosed in the public filing documents.  But there are a handful of states that require the disclosure of names and addresses of members and managers. When this disclosure is required to be on the official formation documents, it becomes a matter of public record.  In some states, there is a separate llc filing requirement to list members and managers and states vary whether they make these filings available to the public.

You will need to check with your particular state to determine its rules.

No.  A DBA (which is short for doing business as) is a filing made at either your local or state level which registers a name for you to conduct business under.  If a person files for a DBA and operates a business under that DBA, this is setting up a sole proprietorship structure.

The DBA is merely a name registration.  It is not a separate legal entity and it does not offer any liability protection whatsoever.  All it does is make it permissible to use such name in connection with your business.

The major reason for starting an LLC is to protect yourself and your personal assets from business related problems and liability.  When you form one, you will need to file an LLC name for your business.  This name must be available in your state of formation for use as an LLC name.

Now, some businesses want to use another name or several names when running their business.  An LLC can file and register for a DBA if it desires to use other names.

In summary, a DBA is totally independent and unrelated to the use of an asset protection entity like a limited liability company for business. It does not offer the liability protection, tax flexibility, or professional and official image that the use of a separately organized entity will give you.

When starting an LLC, you should always spend quality time coming up with a proper name for your LLC  business.  Your first analysis should be business driven.  Come up with a name that will be suitable and advantageous for your business.

Most businesses will use their name as a brand to promote and advertise their products or services so this name becomes very important as you develop branding for your company.  However, for some businesses, the LLC name itself if not important as the LLC will be using other names (called DBAs) for their marketing.  For example, if a group of business owners get together to form an LLC to finance ventures, they may call the LLC ABC Holdings, LLC or ABC Investments, LLC.

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Information about LLC Formation Services
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Once you have come up with one or several potential names you like from a business perspective, you must check to see if the names are available in the state where you intend on forming your LLC.  In every state, you cannot use a name that is already registered with the state by another business.  Thees rules differ in each state.  Some will only prevent use if there is another LLC using it.  Others do not allow a name if another LLC or corporation registered in that state is using it.  While a few even prevent you from using fictitious name filings that are the same as your intended name.

Now, the inquiry goes beyond names that are identical because many states disallow names that are similar to another name.  This gets tricky because some states are very anal about finding names to be similar while others are quite lax.

You can call your state agency to find out the best way to work with them on confirming name availability or some reputable online LLC formation services offer this service for a small fee or even free in some cases.  The LLC Expert offers a Free Name Search in most states: Just Click Here and look for the box on the right to conduct a name search.

Name search is just the first step when starting an LLC.  Make sure you understand this process and requirements and insist on a proper LLC formation to ensure you are gaining the personal liability protection afforded by this type of legal entity.