understand how to start an llc in No Time? The formation of an LLC is pretty straightforward. All that's left is to register it with the IRS and pay the fees. But if you're still not sure how to go about starting an LLC, you should look into these six easy steps to get you started on the right foot. This may help you get off on the right startup foot.

 

Step 1: Choose a State. Ideally, your LLC should be situated in the state in which you live or which you intend to conduct business. But if your intended business model includes operating in multiple states, you'll need to register a separate foreign LLC in each of those other states in which you intend to do business, even if your primary business structure remains in your own home state.

 

Step 2: Choose a registered agent. In the case of a domestic business structure, such as an S-corporation, it's the owner or owners' personal representative, called the "registered agent." In the case of a foreign LLC, it's the business structure itself that is represented by the "registered agent." Either way, though, you'll need an authorized signatory on the bottom of all correspondence relating to the formation, and you'll need to find a qualified secretary to respond to all queries and to perform administrative tasks. Some LLCs are run by their LLC members themselves, while others require that a separate secretary and general counsel to handle these functions.

How to Start an LLC - Avoiding Double Taxation

 

Step 3: Choose a Business Structure. In either case, the formation of an LLC requires that the LLC owners must file the appropriate forms with the IRS. The Domestic Supplement to the Income Tax Laws (form 1040) is the basic form required for most domestic businesses. The foreign LLC filing requirements for its International Registration of Company (IRS 7venth IRS Schedule B), and the Private Placement Memorandum and Schedules (form 812) are more detailed and specific to the international aspect of the formation. Many foreign LLCs are set up as limited liability companies, which are considered a more complex structure than a sole proprietorship.

 

Step 4: Choose a Limited Liability Company or LLC. There are a number of different types of LLCs, including C-corporations, partnerships, LLCs, and S-corporations. When it comes to LLCs, one of the most popular types is a C-corporation. This means that the LLC is actually a separate entity from its parent company and therefore is not taxed like a pass-through entity.

 

One of the main differences between an individual sole proprietorship and a C-corporation is the way it is treated as a pass-through entity. When an individual sole proprietorship is formed, the owners are treated as the sole owners of the business and are required to pay their own taxes on their income. This is in addition to their liability and dividend taxes. When a C-corporation is formed, all of the partners are treated as owners in equal shares and there is no double taxation because the share holders are taxed separately for their income as well as the dividends paid by the company.

 

Forming an LLC is relatively easy, but there are several important considerations to make before starting one. First, you must determine if your state has a statutory sales tax. If it does, the only way to exempt your LLC from this tax is to register the business with the state as a non-profit charity. If it doesn't have a sales tax, the only option is to register the business as a pass-through entity, which exempts the business from both the income tax and the corporate tax.

 

To learn more about how to start an llc, contact a trusted professional business entity broker today. A broker can offer valuable advice about how to set up an effective LLC, including how to avoid double taxation. Additionally, these qualified brokers can assist in the structuring of an effective C corporation or LLC.

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