There are different business forms that an entrepreneur starting a business can select so it is helpful to understand what the best option might be. Business entrepreneurs may have specific questions about a popular, but more recent, business form the limited liability company (LCC).
Business formation is an important step in the process of starting up a company and it is not necessarily a one-size-fits-all process. There are benefits, and sometimes drawbacks, entrepreneurs should be familiar with. A limited liability company is a business form that combines the benefits of pass-through taxation with the limited liability corporations enjoy. Sometimes corporation taxation is referred to as double because the corporate entity is taxed and the shareholders are also taxed.
The process of setting up a LLC includes several steps. The first step is to select a business name that has not been taken by another company. It is important to follow and be familiar with state laws concerning the requirements of setting up your LLC. In addition, articles of organization must be filed and any necessary fees must be paid. It is also necessary to have an operating agreement that sets forth the rights and responsibilities of the LLC members and how the LLC will be run. Lastly, some states require the LLC’s formation to be posted in a local newspaper.
Deciding to set up a business is a big step for any entrepreneur and the first big decision they will make is their business form. Because of the importance of making a good decision concerning business formation, it is essential to understand the options and the benefits of each to determine which is best for the business. When starting up a business, entrepreneurs should be familiar with various business forms including the LLC.