Simple Simon Says: Form an LLCMelissa Gordon
March 9, 2009 — 1,557 views
For the sole proprietor who wants to work at what she enjoys and keep things simple, setting up an LLC is the way to go. The only thing simpler is to remain a sole-proprietorship. But doing so offers no protection for your personal assets. Operating as an LLC offers protection and simplicity.
- The process for establishing an LLC can be done online by simply using one of the many online companies that provides this service or going directly to your state's Secretary of State website. All that is required is a simple document called Articles of Organization which documents the name and address of your business, nature of business, and name and address of a registered agent. There is a registration fee determined by your state.
- Next you will want to draft a simple operating agreement for your business. This helps secure your limited liability status.
- Apply for EIN number for yourself and for your LLC if you have any employees. If you really like things simple, you will probably opt not to have employees, only contract labor. But if you do, file payroll tax reports using the LLC name and EIN.
- Set up a simple but complete method of keeping accounting records. A separate business checking account is a simple start. Keeping your business separate from your personal is the objective. Treat your business like a business.
- File Schedule C and Schedule SE along with your Form 1040 every year and pay your taxes.
- File the appropriate forms to your state each year and pay your franchise taxes, if any.
- Always file supporting documentation for everything you do and every transaction relating to your business.
By your willingness to do these things, you will have established your business credibility with government agencies and given yourself and your family the added protection from any unforeseen events that may threaten your business or its assets.
If you're wondering whether you really need to go through all of this trouble, you certainly don't have to. You're not required to establish a Limited Liability company. But imagine how comforting it would be to know that your family and your assets are protected. After you find yourself in a legal battle with your wealth at risk, it's too late to form an LLC. Considering this option now could mean peace of mind and financial security in the future.
After all, it really is that simple. With just a few easy steps, you have a built in security system as well as the pride of owning an official LLC! How cool is that? It's never been so easy to establish a safe, healthy business that you and your family can feel good about. You won't regret forming an LLC, but you might regret NOT forming an LLC. Most entrepreneurs would much rather be safe than sorry.
Disclaimer: This article is for informational and entertainment purposes only, and should not be construed as legal advice on any subject matter.
About the Author
Melissa Gordon is the publisher of LegalBuffet.com, a complete online resource that compares the legal services offered by various online companies. Find the best company for forming an LLC at http://legalbuffet.com/llc-services /.