The following guide is purely for educational purposes to help you get started. Please understand that I am NOT a lawyer, and you must not construe any of the following information as legal advice.
Funnelsysteme.com is not an accredited law firm, so please consult one if necessary.
Top 7 Questions Business Owners Ask Before Forming an LLC
Which entity type is best for me?
A limited liability company is an organizational business structure in the United States that helps business owners separate their liabilities from business liabilities.
A corporation is an independent entity for tax purposes. Corporations generally pay corporate taxes on their profits, and their shareholders pay personal income on the capital they distribute.
Limited Liability Company
Liability: Moves liability from the founders of the business onto the company
Ownership: More rigid, inflexible member-driven ownership
Fundraising: Less popular entity type
Popular industries: eCommerce, consulting services, small businesses, indie software
Ongoing Governance: Easy paperwork
Taxes: Pass-through taxation = tax on
business income on members' personal tax return
Corporation
Liability: Moves liability from the founders of the business onto the company
Ownership: More rigid, inflexible member-driven ownership
Fundraising: Less popular entity type
Popular industries: eCommerce, consulting services, small businesses, indie software
Ongoing Governance: Easy paperwork
Taxes: Pass-through taxation = tax on
business income on members' personal tax return
Which state is best for me?
There isn't a simple answer for the "Best state."
If you're a U.S. resident, you should form your LLC in the state where you are located.
There are no citizenship or residency requirements to forming an LLC; if you're a non-U.S. resident, meaning you operate your business outside the U.S., Wyoming is the best state to form your LLC.
Here are the top 5 reasons why:
Do I need to be in the U.S. physically?
No. The good news is that you don't need to be a U.S. citizen or a U.S. resident, and no need to visit the U.S. Everything can be handled online.
Restriction by residency:
Belarus
Burundi
Central African
Republic
Cuba
The Democratic Republic of the Congo
Iran
Iraq
Lebanon
Libya
Nicaragua
North Korea
Somalia
South Sudan & Sudan
Syria
Ukraine
Venezuela
Yemen
Zimbabwe
Restriction by citizenship:
Cuba
Iran
North Korea
Syria
What is a Registered Agent?
A registered agent is an individual or business entity that accepts tax and legal documents for your business.
Every LLC is required by law to have an address where they can accept the service of legal documents and notifications from the state.
Choosing a registered agent depends on whether or not you have a street address in the state where you're forming your LLC.
How to choose a business name?
A company name is your introduction to customers.
Your LLC name will last for many years and become an essential part of your brand, and your company's reputation.
Here are a few quick tips to keep in mind:
- Choose a Name That People Can Spell and Pronounce
- Keep your LLC name short.
- Be Memorable But Not Too Unique
- Make Your Name Web-Friendly
- Leave people with a good feeling when they hear about your business.
- Get the .com domain name.
So, take the time to ensure that your name is unique and does not conflict with existing companies.
What is an EIN?
An Employer Identification Number (EIN) is a Federal Tax Identification Number to identify a business entity.
You will need this number to fulfill the filing requirements for your LLC.
This allows the IRS to collect the proper income taxes from your business and enables you to pay that amount. This also makes it possible to file income tax returns, a must for companies operating in the United States.
What does this process require?
- Select your US Address
- Receive Certificate of Formation and incorporation Documents
- Sign SS4 and file to IRS to obtain EIN
- Receive updates about EIN status
- Confirm proof of business with a company domain, business email, and website
- Submit bank account application
Documents Required:
Passport for bank account approval...