As soon as you began thinking about organizing your own business, you probably both read and received advice from a lot of different people and places. No doubt that much of the advice has been centered around limited liability companies, or LLC's as they are frequently called. Ever increasing in popularity, LLC's are undoubtedly one of the most common ways to organize a business today. However, what exactly do you know about LLC's?

A LLC is a type of business that can be formed by just one person/owner, called a "member," in virtually every state. (The State of Massachusetts requires two members to form a LLC.) Generally there is no limit as to the number of members you can have, but it may not be practical to have a large number of members. The daily management of your LLC can be done by either members or managers, but there are advantages to appointing managers to run the company. For example, if certain members are only interested in investing in the LLC rather than running or managing it. The managers can be, but do not have to be, members of the LLC.

Likely the best and most well-known trait of the LLC is that the members (remember that members is the LLC term for owners) will generally not be held personally liable for the debts of, nor for claims against their business. Basically, this means that if your company were sued and ordered to pay a judgment, your personal assets will not be required to pay the judgment. If your business accrues debts, as most businesses will, you will not be obliged to pay those debts from your personal assets. The most you will likely be liable for is any capital that you may have in the business. However, you should also realize that member liability is not always guaranteed, because there are situations, such as if a member signs a personal guarantee in order to get a business loan, that he or she can then be liable for that business debt. That said, as long as you are vigilant about protecting your limited liability and legitimate in your business dealings you should be able to maintain your limited liability.

Probably the other most well-known trait of the LLC is the tax status it receives. An LLC is taxed as though it were a partnership or a sole proprietorship, meaning that it receives what is called "pass-through" taxation. This means that the tax passes through the LLC because it goes through the business to the owners who will then report their share of the business on their personal tax forms. Pass-through taxation is generally much less complex than the alternative method of taxation, corporate taxation, thus making it simpler for you.

When it comes to actually forming a LLC, almost any type of business can do so, although many states require professionals -- such as physicians, lawyers, and accountants, to follow different rules and procedures for organizing or to organize as a Professional Limited Liability Company. For non-professional companies though, the organizing process will generally be as follows (there are some slight variances from state to state.) First, you will create and then file Articles of Organization (some states refer to them as a Certificate of Organization or a Certificate of Formation) with the government agency that is in charge of business filings for your state. You will also be required to pay a filing fee that varies depending on the state. Second, you will want to create an Operating Agreement even though it is not required by any state law. An Operating Agreement is an important document for your LLC to have because it is where you will list all of the essential rules and guidelines for your company. By having an Operating Agreement, it demonstrates that you are legitimately operating a LLC should it ever come into question. Lastly, all new businesses should fill out an IRS SS-4 form in order to obtain a federal employer identification number.

If you choose to let us help you form your LLC, we will provide all of these essential documents for you. Better yet is that each of the documents will be completely filled out, and all you will need to do is sign, date, and then file them by using the filing instructions that we will provide for you. The Articles or Certificate that we provide to you will be specific to your state, and will therefore meet your states filing requirements. Our filing instructions are also specifically designed for each particular state. All you need to do is click here to get started.