How to Apply for Your LLC

How to Apply for Your LLC

Forming an LLC in any State is Simple, just follow these six steps:

STEP 1: Select Your State. …
STEP 2: Name Your LLC. …
STEP 3: Choose a Registered Agent. …
STEP 4: File your LLC with the State. …
STEP 5: Create an LLC Operating Agreement. …
STEP 6: Obtain an EIN.

Do I need to form an LLC? The simple answer is, no, you don’t need an LLC to start your own business, although you may decide you want one. An LLC, or limited liability company, provides personal liability protection and a formal business structure, but you can also get those things by forming a corporation or other type of business entity.

How do LLC members get paid? As the owner of a single-member LLC, you don’t get paid a salary or wages. Instead, you pay yourself by taking money out of the LLC’s profits as needed. That’s called an owner’s draw. You can simply write yourself a check or transfer the money from your LLC’s bank account to your personal bank account.

Do you need a lawyer to set up an LLC? No, you do not need an attorney to form an LLC. You can prepare the legal paperwork and file it yourself, or use a professional business formation service, such as LegalZoom. If you choose to form your LLC through LegalZoom, you will only need to answer a few simple questions online.

Does having an LLC help with taxes? The IRS treats one-member LLCs as sole proprietorships for tax purposes. This means that the LLC itself does not pay taxes and does not have to file a return with the IRS. As the sole owner of your LLC, you must report all profits (or losses) of the LLC on Schedule C and submit it with your 1040 tax return.

Disadvantages of an LLC

• Cost. Compared to a sole proprietorship or partnership, an LLC is a little more expensive to operate. …
• Taxes. A limited liability company owner may have to pay unemployment compensation for him or herself, which he or she would not have to pay as a sole proprietor.
• Banking.
• Separate records.

Tax Advantages of an LLC

This means that LLCs can always take advantage of “pass-through” taxation in which the LLC does not pay any LLC taxes or corporate taxes. Instead, the LLC’s income and expenses pass through to the owners’ personal tax returns, and the owners pay personal income tax on any profits.

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How to Apply for Your LLC

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