Attorneys, Startups, and the LLC
Startups can use attorneys to advise on business formation, tax implications, M&A, help negotiate funding, and handle employment issues. Today I will discuss business formation – specifically the Limited Liability Company (LLC).
The most popular and flexible business entity is the LLC. LLCs are so popular because they offer a wide array of benefits: easy of formation; limited liability for business debts; and -most importantly- pass through taxation. Why file 2 tax returns if you don’t have to. An LLC allows you to file your business taxes on your personal tax return. Another benefit is that LLCs provide limited liability protection to their owners/members, who are usually not personally responsible for the debts and liabilities of the LLC. Creditors cannot pursue the personal assets of the owners to cover business debts.
Formation of an LLC is fairly simple too. First you need to chose a name. In my state, Texas, the company name must include Limited Liability, or LLC at the end of the business name. After deciding on a name you must file a certificate of formation with the state. After filing the papers with the state you need to name a registered agent. If you live in the state you can serve as the registered agent; there are also businesses that provide registered agent services.
Next, I would recommend applying for an EIN tax id. This way you do not have to use your social security number for everything.
This is one of many business formations that startups and small businesses can use. The help of any attorney can help you make sure everything is done correctly. You create and let the attorney protect your ideas.