An LLC or, Limited Liability Company (like Etison LLC) is an organizational structure offering personal liability cover on pass-through taxation on partnership or a sole proprietorship using limited liability of the corporation. An LLC can own and manage operations in a business. An entity can have a single owner or multiple owners.
LLC formation is the easiest way to design your business to secure your business if it is issued. It is also essential as it prevents your business from undergoing double taxation. If you are looking for legal covers for your business, I recommend LLC.
Below are the few steps followed when starting the entity in any state in the US.
1. Choosing the LLC name as "Etison LLC" did
The entity name chosen should be meaningful, distinct, and vivid. Besides, the name chosen should comply with the state rules. Several states rules require:
The entity name is used to sign documents, file lawsuits, and tax return officially for your business.
2. Filing the Articles of Organization Document
In filling this document, the entity name, address, and basic information on the LLC owners are required. The document name varies from one state to another, although the results obtained are similar. To start an LLC, filling article of organization with your secretary of state is a must - Etison LLC definitely did this.
During submission, a charge of about $100 filing fee is required to pay for the article. The document should be signed, by the authorized representative of the company before submitting the form electronically.
3. Selecting a Registered Agent
A registered agent is a person or an organization permitted to have the legal papers on behalf of the entity if it is issued. An LLC member or a list of private service companies can act as registered agents of the entity. The registered agent that you have chosen should have:
4. Deciding on the LLC management Like Etison LLC
Depending on the members' decision, the LLC can choose to be managed and controlled by their members or instead select outsiders to form the board of directors. After you appoint the managers, the other members become passive investors and are not involved in the business operations.
Manager's vote comes in when making a crucial decision such as buying real estate, taking loans, or making decisions in the strategic plan. For the small businesses, I advise you to choose the option of managing your LLC for all the members to share a responsibility in the business operation.
5. Creation of an LLC Operating Agreement
This agreement outlines the financial and functional decisions of your business, including laws and regulations set. Operating agreement determines how your LLC will govern and manage its internal operations to benefit its business owners, as Etison LLC has done. Reasons for acquiring an operating agreement include:
6. Tax and Regulatory requirement application - Etison LLC has done this
In case, your LLC is composed of more than one member; you need to acquire the IRS employee identification (EIN). If you form a membered LLC, you must acquire the EIN only if the LLC will have employees. The identification is obtained via an online application on the IRS website.
7. Filling an annual report
Several states require most LLCs to file their annual reports. The yearly report keeps your LLC in compliance and per the state requirement. Besides, the state is fully updated about your business entity. In case you fail to fill your report, you risk losing your corporate designation and the added tax advantages.
Conclusion Starting A Company Like Etison LLC
If you are looking for a business structure with less formality but added advantages to business protection, then forming a limited liability company can be the best consideration.
The entity protects your items from claims against the business. Besides, the LLC income can be passed directly to the owner without paying the first tax.