One of the first steps to establishing your business is to file articles of organization with your state. Different states have their own requirements for this paperwork; be sure to check with your state for more information.
An LLC is a legal business entity that offers liability protection for members and allows owners to avoid double taxation on profits. It also allows for flexible management and is a good option for small businesses that want the benefits of a corporation but without the high startup costs and complicated taxes.
Articles of organization
Every US state requires business owners who want to form an LLC to file articles of organization. These legal documents outline important information about the business, such as its name and management type.
In addition, you may need to designate a registered agent. This person is responsible for receiving all legal and tax documents for the business.
You will also need to decide if you want the company to be managed by its members or by a manager. This is an important decision, as it will affect how the business operates and what types of risks and liabilities it can carry.
The Articles of Organization should also include the name and address of your principal place of business, which is where your records and books are kept. It should also contain your authorized registered agent’s name and address.
Members
Members of an LLC are the individuals who own a portion of the company. They often make capital contributions that range from start-up funds to real assets like office space and equipment.
The members have the right to a percentage of the business profits, voting rights, and a number of other rights that are outlined in the LLC’s operating agreement. In addition, members are usually protected from personal liability for the debts and obligations of the LLC.
Depending on how the LLC is managed, members may have the ability to vote on all matters affecting the LLC’s business and affairs. In manager-managed companies, however, members have limited voting power and are generally only able to elect managers and vote on major changes.
Registered Agent
When you create an LLC, you will need to designate a registered agent. This person will be responsible for receiving official mails and legal documents on behalf of your business.
It is important to choose a registered agent who lives in the state where your LLC was formed. This will ensure that the agent’s address is public and that you don’t receive too much spam or junk mail.
A registered agent can also streamline your company’s paperwork by keeping up-to-date documentation on file. This means that you won’t need to worry about missing any important deadlines or paying penalties for late filing.
Depending on your state laws, you can choose to have the owner of your LLC act as your registered agent or hire a third-party service. A good registered agent service will have local scanning capabilities, document management tools, and a reliable customer support team. They will also provide coverage in all 50 states and offer flexible work hours for your LLC’s registered agent.
Taxes
When you decide to create an LLC, it’s important to understand how it will be taxed. This will depend on several factors, including the number of members and elections that have been made.
One of the most appealing aspects of an LLC is its tax flexibility, which can be particularly beneficial for small businesses. This is because an LLC can choose to be either taxed as a corporation or as a partnership.
If an LLC is a partnership, the profits of the business are not directly taxed by the IRS but instead are passed through to members’ personal income taxes on their individual returns each year.
However, if an LLC is a corporation, the company pays both federal and state corporate income taxes. Also, if the business sells taxable goods and services, it must collect and remit sales taxes on those items. Finally, if the business has employees, it must pay payroll taxes. These will vary from state to state.
