Creating an LLC – What Are the Disadvantages?

Creating an LLC

Creating an LLC is the first step towards owning your own business. In making this choice, you must do extensive research and answer only 12 questions. However, there comes a time when you need to pull the Trigger. And when you reach that point, you should already know how to make an LLC. The procedure of creating an LLC is not difficult.

First, you have to pick your LLC’s name. Since, many people choose “Limited Liability Company” or “LLC” for their business, it is recommended that you use “Limited Liability Corporation.” Other names are also available, including “corporation,” “c corporation,” “incorporated entity,” and “ominium corporation.” Other names are also available such as, partnership, corporation, partnership, and limited liability company.

Second, choosing a name for your Limited Liability Company is a crucial part in creating an LLC. Most companies follow the simple script and choose a name which is easy to remember and pronounce. However, this is not helpful in creating an LLC. The name of your Limited Liability Company should be related to the services or products you offer to your customers. Avoid using words like “limited liability,” “limited liability corporation,” and “asset-based ownership.”

Next, choosing your business structure is another vital part of creating an LLC. There are two basic types of business structures to choose from; the pass-through and the limited liability. The pass-through business structure is the simplest and the most common way of creating an LLC. It allows you to separate your personal assets from those of your business.

On the other hand, creating an LLC with a limited liability company also allows you to shield your personal assets from personal taxes. This tax shelter is referred to as an internal revenue service. However, if you incorporate your business, then your personal assets are subject to internal revenue service taxation.

Operating agreement is another important issue to consider when creating an LLC. The operating agreement is a contract between the members of the LLC that specify the business operations and financial operations of the LLC. Operating agreement ensures that all the members of the LLC share equal responsibilities as to how the business will be conducted, where it will get its profit, how it will spend its personal assets, and who will get the rest of the money. You can easily download operating agreement templates for free from the internet.