- January 11, 2014
- Posted by: zbplaw
- Category: Articles, Tips
A limited liability company, or LLC, is a business organization that gives business owners some flexibility that they would not get if they were registering their business as a corporation. An LLC may not be right for every type of business, but there are several benefits of this type of organization.
An LLC classification can simplify a business’s taxes and help save money on tax obligations. This is because LLCs are considered conduit entities, so that taxable income is passed on to the business’s owners and that the organization does not have to pay taxes.
Protection of personal assets
With an LLC, owners of the business can protect their personal assets from liability. As a result, if the company has been sued successfully, or has bad debts, the owners of the company do not have to worry about their personal property being seized in order to pay these debts. Increased credibility
A company does not have to be a corporation in order to get respect from the public. When a business goes through the process of obtaining an LLC, that creates a certain trust in the community, and customers will have more faith in that business.
How to create an LLC
In order to create an LLC, a business must follow these steps.
- Pick the right company name. Before choosing a name for the organization, business owners must make sure that the name of the LLC complies with the rules set forth by the Department of State. There are words and phrases that cannot be used in the name of an LLC, so companies must avoid them when they register. In addition, the name of the company must be adequately unique from other LLC names, and LLC must appear in the name of the business.
- Pay the filing fee. Every state established its own filing fee to register a business name and structure. In Texas, it costs $300 to file for an LLC. This can be paid by cash, money order, credit card or check.
- Publish notification that the LLC has been formed. An LLC is required to publish a notice announcing the formation of the organization in two newspapers for six consecutive weeks. The newspaper must be located in the same county as the LLC. If a business owner is not sure which publications are acceptable, the County Clerk has a list of newspapers that can be used.
Get the legal help your business needs
Business law can be extremely complicated, so it is best to have someone explain what the laws mean in order for you to make informed decisions about your business. If you need help with a matter concerning your business, consult an attorney.