The incorporation process involves the preparation of specific documents, including a document known as the “Articles of Incorporation,” and the submission of the document to the Secretary of State. (In the case of LLC, the main document used for incorporation is called the “Organization Charter”.)
“Company establishment” is a synonym for establishment. This refers to the process by which a company or LLC is formally formed.
Hiring a lawyer to start your business is not required by law. Nevertheless, it may make sense to hire a lawyer to set up a company. It is recommended that you see a lawyer instead of using our services if your incorporation seems to involve a high degree of complexity, or if you have specific questions unanswerable on this site. Business owners sometimes feel more assured by hiring a lawyer to incorporate. In fact, if you have the extra time and money, we encourage you to hire a lawyer. However, Initial Mile is an accessible alternative for entrepreneurs who require precise, and efficient incorporation services for a fraction of a lawyer`s fees.
In order to incorporate effectively, you need to know the following pieces of information:
Why you need to be incorporated
Integration is essential to the success of any business. The incorporation process involves the preparation of specific documents, including a document known as the “Articles of Incorporation,” and the submission of the document to the Secretary of State. (For an LLC, the main document used to incorporate is referred to as the “Articles of Organization.”)
Below is an explanation of why it is necessary for every business to incorporate. The primary advantages of incorporation are discussed, as are the risks involved in operating an unincorporated business.
Shield yourself from liability
The most important reason to incorporate your business is to protect yourself from business liabilities. If you are operating an unincorporated business, its creditors may be able to reach your personal assets. Assets such as your personal residence and personal bank account can be used to pay business debts or to satisfy a lawsuit against your business. When you are incorporated, the corporate creditor does not have access to your personal assets as a incorporated company and its owner is a separate entity.
Establishing eternal existence and transfer of ownership
Eternal existence is a beneficial aspect of an incorporated company. Eternal existence means that the survival and going concern of a company is unaffected by the retirement or death of either company.
Owner The existence and operation of a partnership is usually interrupted by the resignation or death of one of the owners. Remove that risk from your business by including it.
Similarly, the ownership interest in an unincorporated business may be very difficult to transfer. If the business is incorporated, the shareholders can easily transfer their interest by sale or gift.
Gain tax advantages
If you incorporate your business, there are tax deductions for a wide variety of operating costs which will substantially cut back your company`s overall tax liability. These deductions may include the cost of materials/production, employee wages, the cost of insurance, the cost of retirement plans, as well as business travel and entertainment expenses.
Enhance the company`s image
Another crucial reason to incorporate your business is that it adds credibility to its operation. By incorporating and using “Inc.”, “Co.”, or “LLC” after the company name, the company will be more recognized. Customers are more likely to trust and trade with companies that have this positive image. More importantly, when a company seeks external funding, the transaction becomes more attractive to banks and investors.
Improve management skills
The decision-making power of an incorporated company is centralized. This usually means that shareholders have delegated authority to the board of directors. The Board of Directors may delegate this authority to the officers of the Company. In an unincorporated business, the power structure and decision making authority may not be defined and may be subject to manipulation by a co-owner or employee. This lack of structure will substantially affect the ability of the business to operate. Subtract this risk from your business by incorporating and thereby centralizing its management structure.
What is a limited liability company (LLC)?
A Limited liability company (LLC) is a business entity that offers limited liability protection and pass through taxation. Like a company, LLC legally exists as a separate entity from its owner. Therefore, the owner is generally not personally liable for the company’s debt and liabilities.
LLC allows pass-through taxation because income is not taxed at the corporate level. However, if the LLC has multiple owners, you must complete the LLC tax return. All LLC income or losses disclosed in this statement will be passed on to the owner. Owners, also known as members, are required to file their income or loss on their personal tax returns and pay the applicable taxes.
What LLC Forms are required to start a limited liability company?
Articles of Organization, sometimes also called a Certificate of Organization, must be prepared and filed with the State. Filing fees along with any applicable initial franchise taxes or other initial fees must also be paid. If your LLC is formed through Initial Mile ,all you need to do is complete our simple LLC
Forms and we will do the rest. We will prepare and file your Articles of Organization and LLC forms, and pay the initial filing fees on your behalf.
Who can form an LLC?
Generally, there are no resident or legal restrictions on who can form an LLC. However, in some states, members and / or managers must be at least 18 years of age or consent age. For more information on each state’s requirements, please see the LLC Formation Requirements page in the State Guide.
Do I need a lawyer to set up an LLC? No, you can create and submit your own articles of incorporation (one of the most important LLC forms). Make sure you understand the requirements for the intended state of incorporation. You can use the Initial Mile Service to embed LLC and fill out an LLC form. If you’re not sure which company type is best for you, check out the company type comparison chart or try the Incorporation Wizard. If you have any questions, please consult a lawyer or tax accountant. Please tell me the name of LLC.
Choosing the name of a new business is an important decision. It is usually wise to choose a name that conveys the image you need for your new business. Choosing a name that is easy for customers to remember and spell is also a big advantage. Legally, the name you choose for an LLC cannot be “seemingly similar” to an existing company in that state, but must be “distinguishable in state records.” The name you select may not be available in the incorporated state. That’s why Alliance wants a second option on the LLC order form. In addition, in most states, you need to add “limited liability Company” or the abbreviation “LLC” to the name you choose to indicate that your company is an LLC.
How many people do you need to form an LLC?
It is not necessary to state the maximum number of members (owners) that an LLC can have. The IRS allows one LLC to be eligible for pass-through tax treatment. State-level taxes on one member LLC may vary. How is limited liability companies (LLCs) taxed?
LLCs are usually taxed like partnerships with pass-through taxation. Multi-member LLCs are required to file an information tax return, while single-member LLCs are not. In either case, the profit or loss is “passed through” by the company and reported on the owner’s tax return. The tax payable then is paid by the owner at the individual tax level. LLCs can also choose to be taxed like a company, and LLC profits are taxed at the company level. The treatment of state income tax on LLC profits and losses may or may not reflect the treatment of IRS tax in some states. Contact us for more information on state tax obligations.
LLCs are also subject to franchise taxes levied by the state of incorporation. Franchise tax is a tax levied on the mere privilege of being an LLC incorporated or registered to do business in the state (through a process known as “foreign qualification”). Concession taxes should generally be paid annually and the amount varies from state to state. The first payment must be made within 3 months of the establishment of LLC. The state will invoice you to remind you of this payment.
What is the organizational structure of LLC?
LLC is owned by its members. They are similar to partnership partners or shareholders of a company, depending on how LLC governs them. If the LLC employs a manager, the member will be like a shareholder because the member will not participate in management. When an LLC does not use a manager, members are very similar to partners in that they speak directly to company decisions. Ownership of a member of an LLC is represented by membership shares, much like a partner holds shares in a partnership and a shareholder holds shares in a company.
How is LLC managed? An LLC can be managed by its members (owners) or selected managers. When an LLC is managed by its members, it acts like a partnership. Each member has an equal say in the decisions of the company. If members wish, they can appoint one or more managers who act with the same capabilities as the company’s board of directors. These managers are responsible for the work of LLC. Affiliate management is the usual standard rule of state law. This means that if no manager is selected in the organizational charter, LLC form, members will direct LLC’s work.
Should I choose a limited liability company (LLC) or S Corporation?
Both S Corporation and LLC have pass-through taxation, but S Corporation lacks the flexibility of LLC in allocating income to its owners. In addition, LLC may offer multiple classes of membership, while S Corporation may own only one class of shares.
In terms of number of owners, any number of individuals or entities may own interests in an LLC. However, ownership interest in an S corporation is limited to no more than 100 shareholders. Also, S corporations cannot be owned by C corporations, other S corporations, many trusts, LLCs, partnerships, or nonresident aliens. Finally, LLCs are allowed to have subsidiaries without restriction.
There are also differences in the handling of employment/self-employment taxes.
What is a publication requirement?
A few states require notice to be published in a newspaper that an LLC has been formed. States with this requirement for LLCs include: Arizona, Nebraska, and New York. The Published Notice of Formation Service can be added to a Initial Mile LLC Formation Service order in each of these states. For New York, limited liability entities (LLC, LP, LLP), the New York Published Notice of Formation Service can also be purchased independently from Initial Mile. In New York, a limited liability company must publish its incorporation or registration in two New York newspapers and submit a certificate of issuance to the Department of State within 120 days. It has been published in two newspapers at the district level. Failure to comply with disclosure requirements by the deadline will suspend the authority of companies doing business in New York State.
Does LLC need a registered agent?
A registration agent is required when establishing an LLC or registering to do business in another state (a process called “foreign qualification”). Initial Mile includes registered agent services in its Incorporated Services package
Maintain your privacy. If the service of the complaint is provided by the company, it is often provided by the local law enforcement agency. Most business owners do not want police officers to appear in front of customers, employees, or neighbors (in the case of home-based businesses) and tell them that their business is being sued. Using the Initial Mile as a Registered Agent Service Provider allows you to receive all procedural benefits quickly and in secret.
Maintain registered offices and normal business hours. The company’s registered agent must be available during normal business hours in order to receive important documents at the time of delivery. If you set your own time or are often away from your office or home office, Alliance as a Registered Agent will not miss these important communications.
How can I make sure that an LLC always has a registered agent?
The LLC Formation Services package includes a 6-month registration agent service. As a registration agent, Initial Mile meets state legal requirements and provides ongoing compliance support to your business. When you order an Incorporated Package, you will not only receive the registration agent service for free for 6 months, but you will also be able to avoid this valuable service interruption with a convenient automated update.
How do I get started with the establishment of a limited liability company (LLC)?
After deciding to incorporate an LLC, you will need to submit an LLC form for the articles of incorporation and payment of state and initial costs. The Alliance’s LLC Formation Services package handles these steps automatically.
After submitting the LLC form, we recommend that LLC hold an organizational meeting of members / managers. This meeting will help to start an LLC by adopting an operating Agreement, issue membership interest certificates to members, and undertake other preliminary matters such as authorizing the opening of a bank account for the LLC. View our article on Business Compliance Requirements to learn more.
What is Rush Filing Service?
Initial Mile`s Rush Filing Service for LLCs allows you get an LLC incorporated quicker by decreasing your incorporation filing timeframe to 24 to 48 hours in certain states.
Is LLC Rush Filing Service available for every state? No. Initial Mile‘s Rush Filing Service for LLCs is available in some states. The processing time next to each state is the time it takes to receive confirmation that the LLC form has been submitted to the state, following the approval or approval of the name. The time frame does not include weekends and public holidays. The total time it takes to receive and return a state-approved legal entity establishment document may take approximately one week after confirmation.
How fast do you receive your documents if you choose the rush filing service?
The 24 or 48hour filing time is for the LLC formation only. It typically takes longer for the states to produce the filed incorporation documents. Once Initial Mile receives your documents from the state, we will ship them to you via FedEx Overnight delivery. This means you should have your documents in hand anywhere from just a few days to one week after filing. We will also scan them into our Online Status Center, making them available to you before you receive your original documents to help get an LLC started as quickly as possible.
Note: Some states require your signature on the incorporation documents when someone other than Alliance is acting as registered agent. In these cases, the filing timeframe of 24 to 48 hours begins after we have received the signed documents and received any applicable prior approvals or consent.
Why should I include Rush Filing Service with my LLC incorporation service?
Using Initial Mile`s Rush Filing Service secures your LLC`s name and filed date in as little as 24 hours. Our Rush Filing Service is particularly valuable when you need to get an LLC incorporated quickly or need proof of your LLC`s incorporation to secure a contract or to open a bank account
