UNDERSTANDING LLCS: WHAT IS AN LLC AND HOW DOES IT WORK? INTRODUCTION:

 While you may not need one you might want to have one as forming an LLC helps protect your personal assets. With an LLC you can now open business bank accounts, hire employees and get business permits and licenses 

 While both protect owners so they're not personally liable for business liabilities and debts, the key differences are in how they are owned. LLC’s can have one or more individual members while corporations have shareholders. Corporations generally have a more formal system of record-keeping and more reporting requirements. 

 A Single-member LLC can file as a sole proprietor. An LLC with multi-members can file as a partnership. Also, an LLC can file as an S Corporation or C Corporation by making the appropriate elections with the IRS. 

 Once you have decided on a name for your business choose the correct business registration price plan that fits your current needs. Once we receive payment we verify the availability of the name choices, draft the articles, file them with the state and send you all the appropriate documents after they have been filed. 

 A corporation is a legal entity that exists separately from its owners. Creation of a corporation occurs when properly completed articles of incorporation are filed with the correct state authority, and all fees are paid. 

 All corporations start as "C" corporations and are required to pay income tax on taxable income generated by the corporation. A C-corporation becomes an S-corporation by completing and filing federal form 2553 with the IRS. An S-corporation's net income or loss is "passed-through" to the shareholders and are included in their personal tax returns. Because income is NOT taxed at the corporate level, there is no double taxation as with C-corporations. Subchapter S-corporations, as they are also called, are restricted to having no more than 100 shareholders. 

 An attorney is not a legal requirement for incorporating a business in any state except South Carolina, where a signature by a South Carolina attorney licensed to practice in the state is required on articles of incorporation. In every other state, you can prepare and file the articles of incorporation yourself. However, if you are unsure of what steps your business should take and you don't have the time to research the matter yourself, a consultation with a good corporate attorney is often well worth the money you spend. 

First, we recommend that you spend some time coming up with a name for your corporation. Although each state has different rules concerning the naming of your corporation, the most common rule is that it must not be deceptively similar to another already formed company. The corporate name must include a suffix. Some examples are "Incorporated", "Inc.", "Company", and "Corp." However, your state may have different suffix requirements 

The primary advantage of incorporating is to limit your liability to the assets of the corporation only. Usually, shareholders are not liable for the debts or obligations of the corporation. So if your corporation defaults on a loan, unless you haven't personally signed for it, your personal assets won't be in jeopardy. This is not the case with a sole proprietorship or partnership. Corporations also offer many tax advantages that are not available to sole proprietors. Some other advantages include: A corporation's life is unlimited and is not dependent upon its members. If an owner dies or wishes to sell their interest, the corporation will continue to exist and do business. Retirement funds and qualified retirement plans (like 401k) may be set up more easily with a corporation. Ownership of a corporation is easily transferable. Capital can be raised more easily through the sale of stock. A corporation possesses centralized management. 

 Most every state requires that a corporation has a registered agent. That agent must have a physical location in the formation state. The registered agent can typically be any person (usually a resident of the state) or any properly registered company who is available during normal business hours to receive official state documents or service of process (lawsuit). 

 Most states allow for one person to act as shareholder, director, and all officer roles. 

We provide a default of 200 shares, although you can choose any amount you want on all orders. Your par value is not requested on all orders, and is usually expressed as "No Par Value" or some dollar amount per share such as "$1.00" or "$0.10." Some states require that you do not issue your stock for less than the par value. Some states also base their fees on the number of shares authorized, multiplied by the par value. 

Your corporation is required to have an Employer Identification Number (EIN) also known as your Federal Tax Identification Number so that the IRS can track payroll and income taxes paid by the corporation. But, like a social security number, an EIN is used for most everything the business does. Your bank will require an EIN to open your corporate bank account. We provide two EIN services: Basic EIN Service - We prepare and email your SS4 (EIN application) & easy one-page instructions for obtaining your EIN. You need only review, sign and fax or call in the information to the IRS to get your EIN. Full EIN Service - We actually obtain your company's EIN for you. 

 You must have your initial shareholder(s) meeting to elect your director(s), if your director(s) haven't been designated in the articles. Then, you must have your initial organizational meeting of your directors. At this meeting, you will need to elect your officers, adopt your company's bylaws, and issue your stock (among other actions). 

 Once you have decided on a name, order your corporation online. Once we receive your paid order, we verify the availability of your name choices, draft your articles, file them with the state and send you all appropriate documents after they have been filed.