Cheap LLC Setup: Everything You Need to Know
Filing a cheap LLC setup is a great way to get started in a business. 3 min read
2. Cheapest Way to Form an LLC
3. Forming an LLC: Do-It-Yourself Way
4. Forming an LLC: Use an Incorporation Service
Cheap LLC Setup
Filing a cheap LLC setup is a great way to get started in a business. Setting up an LLC is not overly expensive, but there are some things you will need to know before getting started if you want the process to be inexpensive.
Cheapest Way to Form an LLC
Starting an LLC is one of the most crucial steps in becoming a business owner. Cost, however, often prevents people from taking this important step. When you are not generating much revenue, it can be scary to spend money right away. Starting a business is very expensive with all the costs necessary including inventory, salaries, taxes, and so on. It is best to save anywhere you can.
A LLC, also known as a limited liability company, is a business that provides different benefits regarding taxes on your business’ profits. They also provide additional flexibility with regard to how you can manage your business, unlike with a traditional corporation.
While starting your business as an LLC is a great way to get started, you need to remember that if you ever intend to raise money through investors, you will need to move into a traditional C corporation. Investors are more attracted to corporations for tax purposes.
An LLC is an entity that passes through the burden of taxation to the owners of the LLC. You are going to be the owner initially, then others will be included as you accrue investors. If someone invests in your business, he or she will not want to have the tax liability.
Setting up an LLC is rather inexpensive and a great way to get your foot in the door. You will decide who the members are and how much of the business each member will own. Among the many advantages, you do not have to abide by most of the regulations that c-corps do.
There are some additional advantages to setting up an LLC:
· You will not be held financially responsible for the expenses or debt of your business unless the corporate veil is pierced
· The rules in the management of an LLC are very flexible
· You can tailor your LLC based on the type of business you own
· You are only taxed once instead of twice like with traditional corporations
However, there are some disadvantages as well:
· The veil is easier to pierce than with corporations thanks to laws that have not been fully established
· You may be required to pay state franchise taxes
Forming an LLC: Do-It-Yourself Way
The cheapest way to form an LLC is to file your own incorporation statements in your state, depending on the fees. The incorporation statements for LLCs are the articles of organization. The name of the documentation, however, will vary from state to state.
You can hire a person to form the LLC, like a lawyer or an organization that specializes in forming businesses. This will add to your costs, however. Remember also that if you hire out your LLC formation, you will still have to pay the state filing fees.
You can save substantial money by filing the articles of organization on your own. Your Secretary of State’s office will have all the information you need to do it yourself. You may also find all the forms you need online. You could possibly form your entire LLC online in some states.
It is not difficult to file the necessary forms to incorporate your LLC. You should have no issue filing the forms yourself, whether by mail or submitting them online.
Forming an LLC: Use an Incorporation Service
You may not feel comfortable handling this paperwork on your own, which is understandable since this is a significant step in becoming a business owner. You can also utilize an incorporation service to help deter the expenses of forming your LLC.
You can find many businesses that work for business owners like yourself that will complete and submit all of the required forms for your LLC. Keep in mind, however, that these companies that do this do not specialize in legal assistance. You have to be wary when choosing your service to ensure that your business is fully legal.
If you need help with your cheap LLC setup, you can post your legal need on UpCounsel’s marketplace. UpCounsel accepts only the top 5 percent of lawyers to its site. Lawyers on UpCounsel come from law schools such as Harvard Law and Yale Law and average 14 years of legal experience, including work with or on behalf of companies like Google, Menlo Ventures, and Airbnb.