|Posted by Newberry Area SBDC on June 19, 2015 at 7:25 AM|
So, you are going into business and you would like to protect your personal assets - smart! I am not an attorney and cannot give legal advice, but I can help you create your LLC at the Newberry Area Small Business Development Center (SBDC) at no charge. I've had several clients come to me after they have literally spent 100's of dollars getting this done on line or with a lawyer, and it frustrates me because I could have helped them FREE.
First, what is an LLC? LLC stands for Limited Liability Company (LLC). It is a type of "business structure"; there are 3 basic forms of for-profit business structures:
• Sole Proprietorship (and partnerships) - simple, just start your business, but the owner is fully liable (could lose your home, car, etc.)
• LLC (and LLP's) - Limits the owner's liability. More complex than a sole proprietorship, but it protects your personal belongings
• Corporations (different kinds of corps, c-corps, s-corps, most complex and you need an attorney)
I normally recommend that my clients form LLCs because I want them to protect their personal assets. Even if the business isn't something that is high risk for danger or accidents, it is always better to be safe than sorry. An LLC isn't an insurance policy, but it does protect the owner. (Unless of course there is gross neglect - but I don't want to get into anything too deep or too legal, those questions have to be handled by an attorney). An LLC has a onetime fee of $110. That is the State's Fee - so if you go to an attorney or use an online company like a Legal Zoom, that fee is part of what you are paying. If you come to my SBDC office, I can walk you through this and you can do this online and I can help you understand the terms that they use. Single member LLC's are easy peasy; once there are partners involved, other than spouses, I generally recommend you seek out an attorney you trust, only because there are then things to think about that you have never thought about... (What happens if one of you win the lottery and becomes AWOL? What happens when one person wants to sell? What happens when one person is ill and can't fulfill his duties? What if one person passes away? Does that business person leave his portion to his partner that has helped grow the business for 20 years, or a spouse they married 10 days ago? Questions you want answered before you sign an agreement).
According to the IRS:
- Limited Liability Company (LLC)
- A Limited Liability Company (LLC) is a business structure allowed by state statute. Each state may use different regulations, and you should check with your state if you are interested in starting a Limited Liability Company.
- Owners of an LLC are called members. Most states do not restrict ownership, and so members may include individuals, corporations, other LLCs and foreign entities. There is no maximum number of members. Most states also permit “single-member” LLCs, those having only one owner.
- A few types of businesses generally cannot be LLCs, such as banks and insurance companies. Check your state’s requirements and the federal tax regulations for further information. There are special rules for foreign LLCs.
So, if you need an LLC, or just want to come in and talk about general business structures, PLEASE don't hesitate to email me for a free appointment. It kills me to learn that my clients that have known me for years don't even know that I can help them with that. Over the last few months I have saved clients thousands by helping them with this on-line, and then I've also found out a day late that I could have saved several clients thousands. I know small businesses starting up don't have money to spare. $650 spent on an LLC could make a huge difference in inventory or marketing dollars, so I want to HELP your business as much as possible.
So, in conclusion, if you are thinking about starting an LLC, please contact us first. We are a free resource here for you! You can learn more about LLCs and other business structures through the SCBOS website: https://www.scbos.sc.gov.
Even if you have been in business for years as sole proprietor and you are thinking about forming an LLC, just visit with us. I see hundreds of people every year, so odds are I've come across someone in your shoes already. If not, we can figure it out togehter or I can call one of our other 20 offices and get you some answers!