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hey guys today we're gonna talk about everything you need to know about LLC's from what is it - what are the advantages and how you can use it to your advantage so let's get to it LLC stands for limited liability company an LLC is just one of several business structures other common examples include corporations sole proprietorships and partnerships but today we're just going to talk about an LLC forming an LLC is the simplest way of structuring your business to protect your personal assets in case your business's suit so this is the most important benefit of having an LLC is that it protects your personal assets so let me clarify what this means this means that if you have any personal assets such as having your own personal chicken account or your a home or any kind of assets that you have either you know items or real estate or anything like that by creating LLC it separates your business from you personally so that if your business gets suit then only your LLC is responsible for that lawsuit and you yourself won't be personally liable unlike sole proprietorships and partnerships LLC's can protect your personal assets if your business is sued as we already talked about also for most small businesses an LLC offers the right mix of personal asset protection and simplicity just in basically just it's a simple structure it's the most simple a business structure online corporations LLC's are relatively easy to form and maintain and are not subject to double taxation we won't get into too much about double taxation but all you need to know is that LLC's that you'll be taxed personally on your own personal tax return you they're not subject to double taxation which is how C C corporations are usually texts so let's look at a breakdown of the LLC benefits first is business duration can be perpetual so let us say by creating I'll see if something happens to you then the business continues to live just by something happening to you let's just say God forbid if you happen to pass away then the business can still continues I also can also be owned by another business there's no requirements for annual meetings for an LLC there's less formalities LLC is formed on the state level and LLC owners can report profits and losses on personal tax returns that's not the case for corporations also owners have limited library protection which we talked about which corporations share the same benefit and LLC's can also be kind of like to be taxed as an S corporation which basically will save you in taxes I won't go to to into too much detail but I'm sure I'll have an have a video that explains this as well LLC's can be owned by one or more people who are known as LLC members so if you're if you ever hear about members these are essentially just the people who own an LLC generally an LLC is managed by its members known as member managed LLC however in some cases members will appoint a manager to handle the LLC's daily operations and this is called manager managed LLC so usually an LC there's two types either member manage which basically means that the else is run by the members themselves or if you want exactly somebody else to run the day-to-day operations then it could be designated as a manager managed LLC an LLC with one owner is known as a single member LLC and then LLC with more than one owner is known as a multi-member LLC so you may hear about single member LLC's essentially all it means is it's a single owner who owns LLC that's all it means so what's the point of forming an LLC forming your business as an LLC helps to protect you against lawsuits again we talked about personnel we talked about personal liability protection that analysis LLC also significantly cuts down on paperwork compared to corporations and other illegal entity types as you talked about LLC is very simple to form and it's very easy on easy to deal with the ongoing requirements of LLC LLC prevents your company from being taxed twice essentially corporations have this determined as I manage this is C corporations not S corporations so by having LLC you'll be you won't have to deal with double taxation and I'll see also helps to present your business as more credible usually other vendor vendors and other businesses want to deal with LLC's don't they don't want to deal with some fighter ships so by having LC you be able to do you'll be able to put yourself out there as a registered and business entity in conclusion LLC is the simplest way to create a business entity in order to protect your personal assets from possible lawsuits so yes there are other businesses business types such as an S corporation but if you're trying to take the easy simple way out then LLC is the best business type if you'd like to learn more about LLC's and which business type is right for you click the link below in the description below and if you have any other questions go ahead and comment look forward to answering all your questions thanks
Thanks for your comment Malik Teeple, have a nice day.
- Twanda Pafundi, Staff Member
what does an LLC and now I'll see your limited liability company is popular type of business structure due to its flexibility and simplicity if you're a small business owner or entrepreneur starting an LLC is one of the best ways to establish credibility and protect your assets watch this video to get a quick overview of the main features of an LLC how an LLC protects your personal assets how LLC's are taxed the importance of an operating agreement and using a professional LLC formation service at the end we'll share some free resources to help you start your own LLC and follow your business dreams millions of new businesses are formed in America every year they are legally structured as one of several choices sole proprietorships general partnerships corporations or limited liability companies the structure chosen for a business will determine who owns the business how taxes are paid and who's liable if a lawsuit or debt arises each state has specific requirements on forming and maintaining a business structure for small business owners and entrepreneurs one of the most beneficial business structures to choose from is the LLC the limited liability company an LLC has several features that make it desirable the first is LLC's acts as a legal entity separate from its owners creating what is known as a corporate veil this protection keeps the owners personal assets secure in the event of a lawsuit or unpaid business debt the second is LLC's that pass through taxation when a corporation makes a profit net profit is taxed distributed to the owners and then taxed again as personal income and LLC's profits are not taxed thus the owners only pay tax on the revenue wants and the third is that business accounting and compliance can be complicated LLC's relative to other corporate structures streamline the formation and record-keeping burden making them easy even for single owner businesses to maintain these are the main reasons you might want to start an LLC for your business there are many other reasons as well for instance privacy which we will address later and the fact that LLC owners do not have to be US citizens or permanent residents if you want flexibility and simplicity LLC's are a great option for starting a new business Oh an LLC protects your personal assets if you operate your business as a sole proprietor a partnership and for example someone gets hurt on your premises or one of your products injures someone you can be sued as an individual and lose your personal assets your home your car etc an LLC protects the business owner by acting as a separate legal entity responsible for its own debts and lawsuits the distinction between owners and business structure is known as the corporate veil it's not enough to simply establish an LLC you'll need to preserve the corporate veil by signing documents as a representative of the company and not as an individual keeping personal and business finances separate following an operating agreement avoiding fraudulent activities and keeping up to date with annual filings you can learn more about the corporate veil at our website and research common forms of business insurance you can never completely prevent problems but to prepare for the worst and protect yourself in your business forming an LLC is a good first step while LLC's are taxed taxes are one of the most complicated parts of owning a business and the penalties are stiff if you fail to comply with the law LLC's are quite flexible on how you choose to be taxed which can be used to your benefit well the details are too much to cover in this video the most important things to know about LLC taxes are if you're a single-member LLC the IRS ignores the business structure in taxes you like at wooden individual the Alice's income is reported on your personal tax return at the end of the year if you have a multi-member LLC the LLC does not pay any income taxes and all profits are passed through to the members who then pay the IRS on their individual tax return well these are the default tax elections you can also opt for your LLC to be taxed as a corporation a C Corp or an S Corp regardless of your tax designation you'll need to file yearly with the IRS check out our federal tax guide or consult with an accountant for specific details on what forms you'll need to file as for state taxes because LLC's are typically pass-through entities individual members pay state taxes not the LLC itself however there are certain types of taxes LLC's may have to pay common forms of state tax you may have to pay include franchise tax sales tax withholding tax and unemployment insurance tax again you'll want to consult an accountant for details the importance of an operating agreement when forming an LLC the most essential document is the operating agreement an operating agreement is an internal document meaning it doesn't need to be filed with the state however it's a critical component of your LLC that outlines the essential ownership and member details of the organization the operating agreement is the foundation of your LLC a living document that gives your business credibility and helps maintain your corporate veil it will outline the management and voting rules capital contributions and distributions membership and dissolution practices and all the basic stipulations on how the companies operated we provide operating agreement templates at our site we also rate and recommend professional LLC services that can help you create a custom operating agreement whose professional corporate agents are secondary companies for hire that can help you form and maintain your LLC which we'll address next using a professional LLC formation service LLC's are formed at the state level and typically cost between 50 and 150 dollars for basic formation to officially form an LLC you'll file paperwork with your state's Secretary of State and once that's been processed you'll register for an EIN or employer identification number with the IRS your ein is like a social security number for your company and is necessary for taxes and banking you can do all this on your own to save money or you can hire a professional service for an additional fifty to one hundred and fifty dollars various providers have different packages but one service to consider is hiring a registered agent when you file your formation documents with the state they'll ask for a registered agent which is like a point of contact to receive mail and official papers an LLC's registered agent can be a member of the LLC or it can be a hired service a hired registered agents of great convenience they'll help you with getting your reports filed on time will keep your business mail separate and will be available at all regular business hours to accept official mail and legal papers on your LLC's behalf final an important additional benefit of using a services privacy a professional service will provide a level of privacy by withholding your personal name and home address from the LLC's contact information there are many reasons you might not want your personal information easily accessible and associated with your busines
Thanks Jocelynej your participation is very much appreciated
- Twanda Pafundi
About the author
I've studied ecology at Woodbury University in Burbank and I am an expert in gas mechanics. I usually feel envious. My previous job was radio & tv program director I held this position for 12 years, I love talking about geography and billiards. Huge fan of Quentin Tarantino I practice pilates and collect bobbleheads.
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