LLC Questions: Everything You Need to Know
2. How Should I Choose an LLC Name?
3. What Type of LLC Rules Do I Need to Know About?
You may have LLC questions, especially if you are starting a new business. Millions of newly-created businesses are established every year throughout the nation. Many owners have traditionally favored a corporate structure, but LLCs grow more popular each year. The reason is because LLCs offer greater flexibility than corporations, including less paperwork, and LLCs offer the same benefits as a corporation.
What Do I Need to Learn About LLCs?
Business owners have plenty to learn about the advantages and disadvantages of starting an LLC, which is why it is always best to consult an attorney if you are uncertain what to file or what type of LLC is best for your business. An attorney’s assistance may cost you an additional $500 if you need assistance with the registration process.
Otherwise, you may prepare all of the legal paperwork and file it accordingly, or you may use a business formation service to help you.
You can also form an LLC without the assistance of a lawyer by filing an articles of organization with the secretary of state of your respective state. An articles of organization is the document that creates your LLC and includes essential information about your business. It is also called a certificate of organization in other states. The filing fees to register an articles of organization will vary anywhere from $50 to $200, depending on state mandates.
With that, you should get the assistance of an attorney that to help you draft an operating agreement. An operating agreement is not mandatory in most states, but it is a crucial document to have in creating a sound management structure, and to ensure that all participants in your LLC are aware of the rules, rights and operating procedures. An attorney that helps you draft an operating may cost you an additional $1,000.
How Should I Choose an LLC Name?
You are free to name your LLC as you please, so long as another business is not using the name. Also, avoid any names that may sound too similar to an existing business name. Some states mandate that you include such designations as “LLC” or any other variation to label the business as an LLC. Check the guidelines in your state to make sure that your name will pass registration.
What Type of LLC Rules Do I Need to Know About?
LLCs in most states have to file periodic reports in the form of annual reports to the secretary of state office. Many states do not require minutes to be kept of meetings, as this is a requirement under a corporate structure. However, it is a good idea to record meetings to avoid potential disputes and to get all vital management decisions on record.
Additionally, each state levies an annual fee as a maintenance cost to the LLC. Further, you may also need to submit a statement or report about the LLC to state authorities.
States with various fee mandates are broken down as follows:
- California: The state levies a $20 reporting fee, including a statement information, which needs to be filed 90 days after the creation date and every two years thereafter. Further, an annual $800 yearly tax is due by the 15th of the fourth month after the LLC creation and each year afterwards. Additionally, you will owe additional tax if your business makes over $250,000.
- Nevada: Nevada charges a $150 based on the list of managers or members, including a $200 fee, which is due within 30 days of the creation date. Also, Nevada does not charge an income tax.
- Delaware: In Delaware, you must pay an annual tax of $300, which is due on June 1, the year that the LLC is created. There is also no income tax in Delaware.
- New York: To start, New York requires that new LLCs publish a notice of its creation in two local newspapers. The newspapers must be in the same county where the LLC was created, and publishing fees can cost up to $2,000. Moreover, the LLC must submit a certificate of publication to state officials, including a $50 fee. For LLCs designated as a partnership, annual taxes are determined based on total income, varying anywhere from $25 to $4,000.
Contact a local accountant to know more about the fees and mandates of your state.
If you still have additional LLC questions, submit your legal inquiry to the UpCounsel marketplace. UpCounsel’s lawyers have graduated from some of the top law schools in the county, and they will use their expertise and law savvy to guide you through the LLC process, regardless of where you live. In addition, our lawyers will help you understand state laws so you can remain compliant and keep your LLC in good-standing with state authorities.