Texas Limited Liability Companies, LLC in Texas
What is a Limited Liability Company?
A Limited Liability Company (LLC) is a separate legal entity that offers the limited
liability protection of a corporation along with the advantages of passing through
profits or losses like a partnership.
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ASK AN EXPERT! CLICK HERE IF YOU HAVE ANY QUESTIONS
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Choosing an ownership structure for your business can be complicated. To find
out whether an S corporation, a C corporation or an LLC is the best fit for your
company, consult a tax lawyer or an experienced accountant who is knowledgeable
about tax advantages and disadvantages of the various types of ownership structures. |
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How is a Limited Liability Company formed?
In order to form a Limited Liability Company, Articles of Organization must be filed
with the required state fee. This is all provided when you order through Speedy.
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What do you name a Limited Liability Company?
The name you select for your limited liability company must be distinguishable form
any other limited liability company within your state. The purpose of this is to
make sure your name is unique and will not be confused with another company. When
selecting a name for your limited liability company, you must make sure it does
not contain any type of punctuation and must end with the words "Limited Liability
Company or the abbreviation LLC or L.L.C.". In the event that you first name selection
is not available, we select the second and third until we have an available name.
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Does a Limited Liability Company need a registered agent?
Yes. All Limited Liability Companies need a registered agent with a physical street
address within the state of formation. This allows a location for any type of legal
documents or tax documents to be delivered to if they are returned from the company
designated address. Should you wish to form a Limited Liability Company in a state
other than your own, there are numerous registered agent services available on the
internet which provide this service at various fees.
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Does the Limited Liability Company need a tax number?
All Limited Liability Companies need a Federal Identification Number. This is the
same thing as an Employer Identification Number or an E.I.N. and is used as an identification
number for the Limited Liability Company. This number is obtained from the Internal
Revenue Service by filing Form SS-4. Some states use the same number but others
require filing for one with the particular state.
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ASK AN EXPERT! CLICK HERE IF YOU HAVE ANY QUESTIONS |
|
Choosing an ownership structure for your business can be complicated. To find
out whether an S corporation, a C corporation or an LLC is the best fit for your
company, consult a tax lawyer or an experienced accountant who is knowledgeable
about tax advantages and disadvantages of the various types of ownership structures. |
back to top
How is a Limited liability Company taxed?
In regards to taxation, the Internal Revenue Service allows the limited liability
company to be taxed as a corporation, partnership or a sole proprietorship. This
election is made when registering with the Internal Revenue Service. Some states
treat the limited liability company differently in regards to taxation, so it is
important to understand your state regulations in regard to the taxation of a limited
liability company, but most follow the federal election.
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Can one person form a Limited Liability Company?
The Internal Revenue Service allows a one member Limited Liability Company for taxation
purposes, but some states do not.
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Are there directors and shareholders with a Limited Liability Company?
There are no directors or shareholders with a limited liability company. Its owners
are designated as "members".
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What determines the structure of a Limited Liability Company?
The structure of a Limited Liability Company is established in the operating agreement.
An operating agreement covers members interests in the company, distributions of
profits and losses, contributions made by members and any other items that the members
might wish addressed. Speedy will provide a basic operating agreement with your
formation, but the agreement is largely generic and does not cover all the specifics
the members may wish. Fill-in operating agreements can be purchased over the internet,
rather inexpensively, and can be completed after thorough discussion with all the
members.
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Who manages the Limited Liability Company?
The company can be managed by the members, or the members may select a manager to
manage the company for them. The Articles of Organization that is filed with the
state addresses the management of the Limited Liability Company. The Speedy order
form requires this information.
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What are the advantages of a Limited Liability Company?
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First most, as with the corporation, is the liability protection that is offered.
A member's liability is limited by the amount they invested in the company or as
specified in the operating agreement.
- Next is the advantage of avoiding
double taxation and having the profit or loss pass through to the member. The Limited
Liability Company is not taxed itself as it is passed through to the members and
only taxed once like the earnings from an S Corporation, Partnership or sole proprietorship.
- Flexibility of management has contributed to the large selection
of Limited Liability Companies as the structure of choice.
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What are the disadvantages of a Limited Liability Company?
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The life of the Limited Liability Company is not unlimited like a corporation. Different
events could occur to dissolve the company.
- With a Limited Liability Company
comes strict record keeping requirements and some states require notices to be published
upon formation and on a continuing basis for a period of time.
- A Limited Liability Company is still a relatively new structure.
|
ASK AN EXPERT! CLICK HERE IF YOU HAVE ANY QUESTIONS |
|
Choosing an ownership structure for your business can be complicated. To find
out whether an S corporation, a C corporation or an LLC is the best fit for your
company, consult a tax lawyer or an experienced accountant who is knowledgeable
about tax advantages and disadvantages of the various types of ownership structures. |
back to top
Is an accountant or attorney needed to form a Limited Liability Company?
Absolutely
not. Any individual can process the required documents with any state. One should
make sure that they are aware of and understand all the requirements of the selected
state before forming the limited liability company. If an individual is unsure of,
or does not understand the legal or financial ramifications of forming a limited
liability company, they should seek the advice of an attorney or accountant. Speedy
does not offer any legal or accounting advice in the selection process. Speedy completes
the required documents necessary to form a limited liability company avoiding the
costly fees.