Why is it important to get an LLC [Videos]

Last updated : Sept 1, 2022

Written by : Forest Olesnevich

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What are the benefits of a Texas LLC?

Limitation of liability.
Registration costs.
Flexible tax treatment.
Minimal formalities.
Flexible membership.
Registration costs.
Registered agent.
Texas taxes.

How much is a LLC in NY?

By mail, send the completed Articles of Organization with the filing fee of $200 to the New York State Department of State, Division of Corporations, State Records and Uniform Commercial Code, One Commerce Plaza, 99 Washington Avenue, Albany, New York 12231.

Which of the following is an advantage of limited liability companies?

The main advantage of an LLC is that it blends the advantages of other business structures together without many of the disadvantages. The LLC is less complicated to set up than a corporation, but it offers its members personal protection against creditors should the company not be able to pay its debts.

How much does it cost to form an LLC in Texas?

A new LLC that is being formed in Texas needs to file a Certificate of Formationâ€”Limited Liability Company (Form 205) with the Texas Secretary of State, and pay a $300 filing fee. If you need a certified copy of the Certificate of Formation, there is a $30 fee. If you need a Certificate of Status, there is a $5 fee.

What is the disadvantage of an LLC?

Disadvantages of creating an LLC States charge an initial formation fee. Many states also impose ongoing fees, such as annual report and/or franchise tax fees. Check with your Secretary of State's office. Transferable ownership. Ownership in an LLC is often harder to transfer than with a corporation.

How long does an LLC last in Texas?

During formation, the owner(s) of the LLC can designate its lifetime in the Article of Incorporation. After said date, if the company is planning to continue its business activity due to any reason, a new date has to be set and notified with the Texas government.

Do you have to pay yearly for LLC in NY?

This field is mandatory for New York State. Certain partnerships, limited liability companies (LLCs), and limited liability partnerships (LLPs) must pay an annual filing fee using Form IT-204-LL, Partnership, Limited Liability Company, and Limited Liability Partnership Filing Fee Payment Form.

Do I need an LLC?

You don't need an LLC to start a business, but, for many businesses the benefits of an LLC far outweigh the cost and hassle of setting one up. by Jane Haskins, Esq. An LLC, or limited liability company, provides personal liability protection and a formal business structure.

How long does it take to form an LLC in NY?

Mail filings: In total, mail filing approvals for New York LLCs take 4 and a half months. This accounts for the 4 month processing time, plus the time your documents are in the mail. Online filings: Online filings for New York LLCs are approved immediately if you file your documents during business hours.

What do LLCs protect you from?

The main reason people form LLCs is to avoid personal liability for the debts of a business they own or are involved in. By forming an LLC, only the LLC is liable for the debts and liabilities incurred by the businessâ€”not the owners or managers.

What are the tax benefits of having an LLC?

LLCs avoid double taxation while enjoying personal liability protection.
LLC allows a small business owner tax deduction.
Self-employment taxes are required.
All profits are taxed regardless of income.
Qualified Business Income deduction (QBI)
Health insurance.
Disability insurance.

How long does it take Texas to approve LLC?

The office normally processes non-expedited documents within 5-7 business days. Expedited service is available for an additional $25 per document and expedited documents are generally processed by close of business the first business day following the date of receipt.

What is required to get an LLC in Texas?

Name your Texas LLC.
Choose your registered agent.
Prepare and file Certificate of Formation.
Receive a certificate from the state.
Create an operating agreement.
Get an Employer Identification Number.
File an LLC Franchise Tax and Public Information Report.

What is better a DBA or LLC?

Generally, a DBA is less costly to maintain, but an LLC offers better benefits and protection. Expanding and selling a business, as well as generating funding, is also easier with an LLC. Also, a business owner does not receive personal liability protection from a DBA.

How much does an LLC cost?

You can file the LLC filing documents online, by mail, or in-person when visiting the local SOS office. The filing costs usually vary from $50 to $150 which is a single-time fee. If you plan to form your company in another state, then you might have to provide additional documentation and pay a higher formation fee.

What's better S Corp or LLC?

If there will be multiple people involved in running the company, an S-Corp would be better than an LLC since there would be oversight via the board of directors. Also, members can be employees, and an S-Corp allows the members to receive cash dividends from company profits, which can be a great employee perk.

What are the benefits of an LLC vs sole proprietorship?

Only LLCs can choose corporate tax status A key difference between LLCs vs. sole proprietorships is tax flexibility. Only LLC owners can choose how they want their business to be taxed. They can either stick with the defaultâ€”pass-through taxationâ€”or elect for the LLC to be taxed as an S-corporation or C-corporation.

Do LLCs pay taxes?

An LLC does not pay income taxes; rather, income is passed to the LLC's members, and they report and pay tax. Even though an LLC does not pay tax itself, it still must report its income to the IRS using an "information" return.

How do I file taxes for my LLC?

If the LLC is a corporation, normal corporate tax rules will apply to the LLC and it should file a Form 1120, U.S. Corporation Income Tax Return. The 1120 is the C corporation income tax return, and there are no flow-through items to a 1040 or 1040-SR from a C corporation return.

Does a single member LLC pay franchise tax in Texas?

Entities Subject to Franchise Tax Each taxable entity formed in Texas or doing business in Texas must file and pay franchise tax.

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Comment by Jerrold Root

hello and welcome today we are going to be talking about seven benefits of having an llc and if you've been following this channel for any period of time you'll know that llc's are pretty much the bee's knees when it comes to yes i said that when it comes to business entities because they are so amazing and they give you so much benefit for very little amount of effort so um before we get started i just wanted to introduce myself my name is taylor darcy from think legal and i am here to help you create the business of your dreams so welcome i look forward to getting to know you and please feel free to leave comments uh we go live every weekday except for holidays 11 a.m to answer your questions and to just hang out and find out what you need to help your business so that not only can i help you with it but that you can get real answers to your questions so please join me if you can at 11 a.m pacific standard time monday through friday obviously except for holidays the number one reason why a llc is has significant amounts of benefit is that it is a it's a hybrid organization a sole proprietor you're taxed on your earnings your revenue period that's just how it is so whatever you bring in minus your expenses uh that's what you're going to be taxed on the the same thing is true for an llc in fact a sole member llc is what's called a disregarded entity for tax purposes the irs looks at it and says nope that income goes straight to the person and so it's it's what's called pass-through taxation so you're not running the risk of double taxation which is what's true in a corporation so that's really one of the big big reasons that you wanted an llc is because of that pass-through taxation the it gives you the benefits without the downside of a corporation it's that's it's it's almost perfect it's not completely perfect it's not it's just very very good very very close it's it's also similar to if for a multi-member llc is similar to a partnership and and it runs similar to a partnership so keep that in mind it has llc rules but for tax purposes especially it's the same thing it's it's 50 of the profit is distributed unless otherwise agreed on so it's it's very very simple comparatively to a corporation to start to manage to things and and it provides you with perhaps one of the biggest benefits and this is why you would do this for a sole proprietor and a partnership is it provides you with limited liability protection which the typical version is that you are limited to the amount of money that you invest or property that's invested into that entity so the best example i can give you is if you have an llc that's done for a rental property then you the only thing that's at risk is the home that's in the rental property or that's the rental property rather than your personal assets especially if you have multiple homes uh or multiple rental properties and so one of the questions i get asked quite frequently is should i have one llc and then have all my homes in it or should i have an llc for each home if i have a rental property and the very easy answer is that you should have each home should have their own llc because then that way that's the most that they can attach assets if there was ever an issue that you needed to worry about that with so that's that's the easy answer to that now each situation is different so don't you know keep that in mind that you want to make sure that you're you're consulting a cpa for your accounting needs or you're consulting a attorney for your legal needs because otherwise you could run the risk of doing something like this is just general overall advice for you so keep that in mind as we discuss these issues that your state may have specific differences that may make one better than the other um the other the next part of it is not only does it it pass through taxation it's easy to operate it protects your personal assets as i said earlier so especially if you have like a 401k instead of uh or or any other type of of substantial assets stocks bonds mutual funds if if you were to be sued without an llc or a corporation for that matter then they could attach to your personal assets a big thing you want to avoid benefit of an llc is that it's easier to transfer or sell than a sole proprietor or partnership because it's an actual entity the entity owns all of the product services the products the assets uh real property uh tangible property and we talked about this a little bit yesterday in by or in previous video about buying and selling a business with an llc if everything is owned by the llc it's a simple transfer document to transfer it as opposed to you would literally have to transfer all the assets and everything that goes with it into another entity in order to transfer so it's a lot more work especially if you're ever considering and i mean ever considering transferring your ownership to a different person like you want to retire and you want to sell your business it's always better to have it as an llc than it is to try to do it as a sole proprietor so if that's something that's on your horizon you know yesterday is the best time today is your next best time to start that to do this so you really want to start looking at your goals and if if selling it is going to be part of that you want to make sure that you're preparing now because it only gets more complicated the older you get and and that's why you need to sit down and talk with an attorney for business planning um that so that we can help identify your goals and then make it so that you're getting what you need to to reach those goals the other thing that is very advantageous over a sole proprietor or partnership is that you can get investors if needed you can bring them on as part member and or have a position it opens the door to getting more money now a lot of investors are going to ask for c-corp and can always convert from an llc to a c-corp but especially if you're beginning that might be a little premature so keep that in mind that depends on the investor and depends on the type of money that you're getting so don't don't think this is a it's just easier than as a sole proprietor you're limited to debt only pretty much there's no real equity investment and so it's it's less expensive debt is always less expensive than equity but it's it's harder to get from a because of the risks that go with debt just it just is like lenders are harder to get than equity holders for uh for additional capital and that's that's crucial to know because again this is about planning for your future and not just winging it and if you're planning on or if you need investors then you're definitely going to want to set your business up for that type of success uh so that you can make sure that you're taken care of in in those instances so sitting down with an attorney and giving them exactly what you need can give you the the best outcome for the least amount of money because we can there's a we can fix a lot of things but the problem is is the more difficult it makes it or it gets the more likely it is going to be that it cause it costs more money and it's j

Thanks for your comment Jerrold Root, have a nice day.
- Forest Olesnevich, Staff Member

Comment by Lucas

business hotel

Thanks Lucas your participation is very much appreciated
- Forest Olesnevich

About the author

Forest Olesnevich

I've studied calculus at Ringling College of Art and Design in Sarasota and I am an expert in computer security and reliability. I usually feel cranky. My previous job was high school guidance counselor I held this position for 7 years, I love talking about vr gaming and engraving. Huge fan of Logic I practice wakeboarding and collect match-related items.

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