Is forming an LLC expensive synonym [Detailed Response]

Last updated : Aug 23, 2022

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What are 3 disadvantages of an LLC?

Cost: An LLC usually costs more to form and maintain than a sole proprietorship or general partnership. States charge an initial formation fee.
Transferable ownership. Ownership in an LLC is often harder to transfer than with a corporation.

Is an LLC a big deal?

Forming an LLC offers major benefits for most small to medium business owners. Registering and operating as an LLC will provide business owners legal protection for personal assets, credibility and a long list of other advantages usually only found spread throughout a number of other business structures.

What do LLC owners call themselves?

If you own all or part of an LLC, you are known as a â€œmember.â€ LLCs can have one member or many members. In some LLCs, the business is operated, or â€œmanagedâ€ by its members. In other LLCs, there are at least some members who are not actively involved in running the business. Those LLCs are run by managers.

Why is LLC may not beneficial?

Profits subject to social security and medicare taxes. In some circumstances, owners of an LLC may end up paying more taxes than owners of a corporation. Salaries and profits of an LLC are subject to self-employment taxes, currently equal to a combined 15.3%.

What is the point of having an LLC?

The LLC has two main advantages: It prevents its owners from being held personally responsible for the debts of the company. If the company goes bankrupt or is sued, the personal assets of its owner-investors cannot be pursued. It allows all profits to be passed directly to those owners to be taxed as personal income.

Should a startup be an LLC?

The general consensus is that start-ups seeking venture capital should incorporate as C-Corporations, not LLCs. Interestingly, an LLC is a highly customizable entity through which a company could set up structures similar to a C-Corp.

What is better than a LLC?

In general, corporations have a more standardized and rigid operating structure and more reporting and recordkeeping requirements than LLCs. LLC owners have greater flexibility in how they run their business.

Are LLCs worth it?

A limited liability company (LLC) is the best business structure for most small businesses because they are inexpensive, easy to form, and simple to maintain. An LLC is the right choice for business owners who are looking to: Protect their personal assets. Have tax choices that benefit their bottom line.

What can you write off with an LLC?

What expenses can you write off as an LLC? There is a long list of expenses that you can deduct as an LLC. Some of the main operating costs that can be deducted include startup costs, supplies, business taxes, office costs, salaries, travel costs, and rent costs.

Is an LLC a good idea for a small business?

Forming an LLC not only gives your small business credibility, but it also allows you to protect your personal assets, gain access to unique tax breaks, and establish a centralized structure for your enterprise. Once you have your LLC established, you need a business banking partner to help you manage your finances.

Why an LLC is the best option?

An LLC lets you take advantage of the benefits of both the corporation and partnership business structures. LLCs protect you from personal liability in most instances, your personal assets â€” like your vehicle, house, and savings accounts â€” won't be at risk in case your LLC faces bankruptcy or lawsuits.

What is the highest position in an LLC?

President is the most popular title for the highest ranking manager in an LLC. The LLC Operating Agreement typically gives the President general management powers over the business. This includes the ability to open bank accounts for the LLC.

What is the best title for a business owner?

CEO. Chief executive officer, or CEO, is a common title in the business world and will leave no one in doubt that you're in charge of your company.
President.
Owner.
Proprietor.
Founder.
Principal.
X Director or Director of X.
Managing Member or Managing Partner.

What are LLC members called?

The owners of an LLC are called its members. An LLC member can assume a position resembling a partner, passive investor, or a sole proprietor.

What does an LLC not protect you from?

Thus, forming an LLC will not protect you against personal liability for your own negligence, malpractice, or other personal wrongdoing that you commit related to your business.

What are the four main advantages of an LLC?

It limits liability for managers and members.
Superior protection via the charging order.
Flexible management.
Flow-through taxation: profits are distributed to the members, who are taxed on profits at their personal tax level.
Good privacy protection, especially in Wyoming.

What are the benefits of opening an LLC?

Some of the benefits of an LLC include personal liability protection, tax flexibility, an easy startup process, less compliance paperwork, management flexibility, distribution flexibility, few ownership restrictions, charging orders, and the credibility they can give a business.

What are the 3 types of LLC?

Single-member LLC for the sole-proprietorship (solo entrepreneur)
Multi-member LLC (member-managed LLC or manager-member LLC)
Domestic LLC and Foreign LLC.
Series LLC.
L3C Company (low-profit LLC)
Anonymous LLC.
Restricted LLC.
PLLC and LLC.

How does an LLC save money on taxes?

The key concept associated with the taxation of an LLC is pass-through. This describes the way the LLC's earnings can be passed straight through to the owner or owners, without having to pay corporate federal income taxes first. Sole proprietorships and partnerships also pay taxes as pass-through entities.

Do startups pay taxes?

Yes, even bootstrapped pre-revenue startups that lose money must pay taxes.

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Comment by Loretta Shelburn

hello i'm attorney thomas burton i'm a business law estate planning and asset protection attorney here in wisconsin and today's question has to do with businesses and the name of your business so let's jump right into it the question is the following i registered my business slash created a corp s corp in state i'm doing business in no one had the same name similar but not same however as i was looking to see how my business showed up online i see another website with same name as mine it's the company that had a similar name registered in the same state but publicly they are my same exact name they are an llc i am an s corp can this occur without a problem it's very easy to confuse us as the same company we do similar activities we service the sti industry in multiple areas and have our own rentals the other company just has property rentals do i need to trademark my business name would it even make a difference do i need to change my name since they had one similar first thanks so you can see this is a complex question and as you're thinking about your business or naming your llc this is an important thing to keep in mind now he says str and mentions rentals i think he's referring to the short term rental industry which we commonly think of as rentals on airbnb vrbo and just renting through your own website a vacation home things like that and you can see where there's names that are popular in that industry that likely a lot of people want to use so it sounds like he registered in the same state now this question was asked in wisconsin so i'm assuming it's here in wisconsin and he says an s corp i uh just as a side note in general you don't form an s corp you file the s corp election with the irs to be taxed as an s corp so it's likely he formed either a c corporation or an llc which can both file the s corporation election and then this other entity he doesn't say he says they are an llc so the wisconsin department of financial institutions has the corporate name registry and they have requirements for forming a new llc or corporation and under those requirements the name cannot be substantially similar to a name already in use and they use some examples where in their naming guide you can't just have one small filler word be the difference like acme incorporated and the acme incorporated or green bay packers inc and the green bay packers inc which actually the green bay packers i believe used to be the green bay packers then they dropped the the and it's green bay packers inc also just the last designation whether you're an inc a c corporation or an llc so he's saying they have the same similar name it sounds like publicly had a similar name registered but publicly there my same exact name what may have happened with this first business is that they formed an llc and then they started marketing the llc leaving off a little bit of the name and that's what they're marketing let's say they're called wisconsin vacation rentals or something like that but the llc name is wisconsin vacation rentals of madison llc but their signs and everything just say wisconsin vacation rentals i'm just making this up but that does happen and in terms of trademark and intellectual property you gain the rights by use of the name so if this came down to whether or not he could trade mark his name you have to look at who used the name first in the course of business and in wisconsin there is a way you can register a trade name separately with the state of wisconsin but it doesn't give you federal trademark protections so if he wants to pursue that angle i think you should meet with a trademark lawyer who can do a full search for you and get into this analysis of who use the name first as far as the corporate names on file with the department they only look at are you actually filing a name already in use and if it isn't uh substantially similar if it is distinct is one of the words they use and it's not already in use you can file and get that name so someone could have been using wisconsin vacation rentals as their marketing for 10 years or even just as a sole proprietor but you filed the llc name but doesn't necessarily mean you have the sole use of that phrase in your marketing so that's why it's important for other business owners when you're thinking about starting a business there's two sides of this there's what corporate or llc name is available in the state of wisconsin but you should also look at realistically who are your competitors and do an online search a local search who is already using this name that i want because if you're the type of business that needs that wants to build a brand which it sounds like this guy does as well even if you can get that llc name that's just a little bit different than the other one if it's going to be confusing likelihood of confusion for people searching online and finding you with google and things like that it might not turn out the best for you and maybe you're better off going with another name that is totally distinct from this one that someone else has marketed for years and years so there's ways like when i'm forming an llc for people uh you know if that their first choice a name is available sometimes we can add a word uh instead of badger best painting we can make it badger best painting of madison llc or something like that or northwest badger painting llc to get the llc name but if you're competing with badger painting and they have all this rights and use of the name just because you can get the llc name doesn't mean you're going to be ultimately successful competing with google and online marketing and trying to get that website address and things like that so if your main objective here is to keep the name i would sit down with the trademark lawyer and look at your options and who used it first and things like that if you're just kind of confused over why two entities can have a similar name there is a way you can change your llc name so if you haven't been in business that long maybe you just want to change it completely to something entirely different so that you aren't confused with the other company and i was just listening to a podcast the other day the founder of zillow and he said why he came up with zillow was he really likes words that are invented so they aren't he was able to get the domain name and he just knew he wanted to build a brand around it and it did come from pillow and something else but if you're trying to build this brand you might want to look at a made-up name completely i mean that's up to you and your decision on the marketing end so also you could search the trade name database just to see if the other person did register that trade name like they have the llc like i mentioned wisconsin vacation rentals of madison llc but they're marketing it as wisconsin vacation rentals but registering as the trade name alone isn't the end of the analysis they could have just been using the name for years and years and have built up that intellectual property in the name from the use of the name so i know this gets a little bit confusing but but for others watching the point o

Thanks for your comment Loretta Shelburn, have a nice day.
- Christa Garden, Staff Member

Comment by Latrisha

hey guys clint coons here and in this video we're going to talk about why you should never use your own name when creating your limited liability company or land trust okay let's get started okay so i have another video on naming your limited liability company how to choose the right name but i i see this all the time unfortunately where i sit down with someone and they send me a copy of their existing structure their exist you know their existing entities that they've set up and i'm looking at the names that they've chosen and a lot of times people will use their own name in their planning and they don't understand the rationale why you wouldn't want to do that well if you recall and if you've watched a lot of the content on my channel one of the things that i'm always hitting on is anonymity you can't sue what you can't see but here you are right say my name is clint coons i went out i go out i create a limited liability company and i call it the coons family limited liability company or or i call it the coons land trust or the clint coons limited liability company you've just shot your anonymity right because your name is listed in the title of that company so if i'm looking for anonymity people are just going to pull up the company say hey it's you so that's one major problem no anonymity when you use your own name the second problem you have in putting your own name into an llc or a land trust is that someone could argue in the event that you engage in you enter into a contract with someone that they thought they were entering into a contract with you individually that they didn't realize they were dealing with an llc because your name and the llc you have the same name and so if you ever can you've ever hear stories about people piercing the veil of a limited liability company well this is a a situation where someone may be able to do that because you're associated with it now this isn't to say that you shouldn't ever use your name in a company uh in the name of the company there are certain circumstances like for example if you're a professional it's required under state law that your name be used in that professional entity then it would make sense to do that or if you're trying to brand yourself and you want people to know about you then maybe it makes sense to to set up an entity where your name's associated in the name of that entity but by and large stay away from that do not choose names that relate back to you and don't think hey i'm just going to use my initials they'll never figure that out believe me people will figure that out i mean for example check this out let's assume i set up this llc right here and i call it c and c llc all right clint coons huh well c and c now i have this piece of property right here and i deeded into this llc and i think i have anonymity here because my name's not associated with it you know i've got that little wyoming llc down here owning the interest so if i pulled title and i saw that this used to be under clint coons ll's clint coons individually and now it's held by cnc llc you think that's going to throw me off and i'm not going to realize this is the same person or that clint is somehow involved with this company and then once they figure this out and the camels in the tent is sniffing around you're not getting them out because that person is going to notice that this wyoming llc here is in play and if that wyoming llc owns multiple other llc's that you've set up across the board all pointing back here well game over they're now going to know that you're associated with all of those companies so definitely avoid using your own name whenever you're setting up your llc now if you've already used your name what should you do well i mean the best thing to do if you can is to consider closing that entity down transferring the property out and set up a new entity maybe what you could do as well is uh if i if i had done that made that mistake then i would take this llc a simple solution would be to set up a land trust here transfer that property into the land trust and then set up a new llc over here that has anonymity and then move that land trust interest into that new llc and then close that entity down that way the deed never comes out to your name individually it goes from from the llc to a land trust that you have anonymity with then that land trust is held by a separate limited liability company so that would be a quick easy solution for someone's already done that and just shut that down now you could change the name on the llc but there's going to be a chain a record of that and so if somebody dug they would see hey used to be cnc llc and now it's 1411 mercury street llc and again they can trace it back to you all right guys hope you learned something about that never use your own name when creating limited liability companies take carebye

Thanks Latrisha your participation is very much appreciated
- Christa Garden

About the author

Christa Garden

I've studied special relativity at Notre Dame de Namur University in Belmont and I am an expert in animal communication. I usually feel enthralled. My previous job was agricultural inspector I held this position for 18 years, I love talking about volleyball and drone flying. Huge fan of Patrick Philbin I practice disability sport and collect fabric and textiles.

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