Jennifer Reuting

Individuals are now, more than ever, realizing the power of the limited liability company (LLC). If you’re like many people, you probably understand that an LLC can benefit you somehow; you just don’t know the next steps to take.Read on to find out the benefits of LLCs, get help naming your LLC, and get the lowdown on the different tax types for LLCs so you can make the best decisions for your business.

An operating agreement is a contract that controls how an LLC (limited liability company) operates and how the members interact with the LLC. You might think that as a sole owner of a company that no operating agreement is necessary — after all, operating agreements are comprised of terms agreed to by all of the members, and well, why make an agreement with yourself?

It’s a common myth that you need to form your limited liability company (LLC) in the state in which you live. LLCs are considered incorporated entities, which means that if you maintain them properly, a layer of separation exists between the business and the owners. Think of an LLC as an individual over which you have full control.

If you’re currently operating as a corporation, converting to a limited liability company (LLC) is a clear, good move unless you plan on going public or raising venture capital. The double taxation inherent in corporations is rarely helpful for a growing business. Unfortunately, as good a move as the conversion to an LLC is, especially where taxes are concerned, it can also be a pretty hairy process.

An LLC can be formed in any state you wish, but if your LLC conducts business elsewhere, it must register to transact business in those states. “Conducting business,” refers to serious business, such as hiring employees and leasing office space. Simply selling your products or services to folks in a certain state doesn’t count.

You can't expect to pick a great name for your LLC (limited liability company) out of thin air. Creativity is best served when subject to a few helpful restrictions. The following are a few naming rules for your businesses: Be distinct. Naming your brand-new and improved social media site FaceSpace or MyTube won't give the impression that you are either "new" or "improved.

Because LLCs (limited liability companies) are allowed to elect pretty much any tax status that suits them, the federal returns, information statements, and notices that they are required to file each year vary accordingly. An LLC can choose the following types of taxation: disregarded entity, partnership, corporation, or S corporation.

LLCs, or limited liability companies, are one of the most flexible business entities. They allow you to choose how to distribute the profits, decide who manages the business's day-to-day affairs, and decide how the profits are to be taxed. They also offer a lot in terms of liability protection. The overall advantages of the LLC include the following: Personal liability protection: Any creditors who come knocking or lawsuits filed against your business can't affect you personally.