What Can You Do With an LLC?: Everything You Need to Know
What can you do with an LLC? Know the steps to kick-start your business and how to get the best out of it.3 min read
What can you do with an LLC? Know the steps to kick-start your business and how to get the best out of it.
Things to Do After Forming an LLC
Forming an LLC is just the first step toward starting your business. There are many other things you need to do to kick-start your operations.
Get an EIN
Get yourself an Employer Identification Number (EIN). This identification number is significant if you are planning to hire employees in your company.
Going for a separate tax identification number gives you the following benefits:
- You need not share your social security number with your customers to get an assurance for payment.
- Your clients will take you more seriously when you have an EIN.
Obtain Business Licenses
Forming an LLC and getting a business license are two different processes. After forming an LLC, you must apply for business licenses separately.
A business license allows you to carry out the trade in your industry and geographical area. Examples of a business license include zoning permit, professional license, health department permit, general business operation license, and home occupation permit.
Find out from your local board of equalization offices about the legal permits your business might require. Obtain all the required permits for your industry without waiting for a notice from civic authorities.
You can obtain most of the licenses without having to pay any fee. Some of them may cost you a fee, but even then, the amount would be negligible in most cases.
Getting a license will save you from unnecessary inconvenience at a later point in time. You will be able to focus on your business instead of running from one office to another. Operating without a business license also impacts the credibility of your business.
Get the Required Permits
A seller's permit:
- Makes it easier for you to buy goods from a wholesaler without paying sales tax
- Allows you to sell goods and services in your state
- Allows you to collect sales tax
Most states require you to obtain a seller's permit before you start selling goods and services. You are more likely to need a permit if you are into selling retail or wholesale goods that need tax applied. Check to see if your business requires a seller's permit and apply for it. If you operate from multiple locations, you may need multiple permits.
Open a Bank Account
Never use your personal bank account for your business because that can make it difficult for you to prove that your LLC is a different entity from you. Setting up an LLC protects you from personal liability for business transactions. However, not opening a separate bank account can blow away that cover of protection.
A separate bank account also makes it easier to track your business funds. Regardless of how you fund your company, make sure to open a new bank account solely for the purpose of your business. It should be in the name of your LLC.
Banks usually ask for a certificate of formation and EIN to open a business account; so keep them ready. Some business accounts have monthly fees; choose a suitable bank that gives you maximum benefits at reasonable fees.
Get a Business Credit Card
Just like a bank account, don't use your personal credit card for company transactions. Apply for a separate business credit card if you would like to have better liquidity for your business. It will help you keep track of your business transactions, while keeping the distinct identity of your LLC intact.
Consider Having a Merchant Account
Having a merchant account is essential for conducting online transactions. It allows your customers to make payment through a credit card. It also makes the payment process faster for you since you don't have to write and mail checks, and then wait for their processing. You can open a merchant account with any credit service company.
File Your Taxes on Time
An LLC has the advantage of choosing from several available options on how it wants to file its taxes. Consult an accountant to know the most beneficial tax treatment for you. Since tax filings are subject to deadlines, it's better to get your tax strategy ready immediately after forming the LLC.
It's also important to comply with other formalities involved in the day-to-day functioning of your LLC. Make sure you are aware of them. Seek legal guidance wherever required.
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