Start a LLC, Anywhere
Start a LLC, Anywhere! Forming a business corporation is a big step in a company’s journey. But it is also a confusing one. After all, there are a range of options available, such as the LLC (Limited Liability Company), the S-Corporation and the C-Corporation. Nursing & Behavioral Health Services (NBHS) specializes in starting, managing and growing healthcare businesses. Our business models include home and companion care, adult day services, personal care home, staffing agencies and health products store. We also provide a host of support services to help get that business up and going properly.
Visit us at: http://nbhsllc.com/start-a-llc/. Let us help form your entity the right way the first time around.
Yet at an early-stage for a company the LLC is generally the most popular. Why is this so?
Less Paperwork, few Procedures and sometimes minimal fee: Yes its true, running a business is time consuming. If anything, a key reason for why the LLC was formed – which happened during the 1970’s – was to make the procedure less difficult. Keep in mind that for most states you just need to pay a fee, file the articles of organization which is fairly easy to do and is mostly done online and thus conceivably makes annual filings (which are also fairly straightforward).
But it surely does not mean that you should run your LLC with minimal effort! It’s advisable to put together an operating agreement (particularly if you have partners). This sets forth the governance of the LLC, such as with allocation of profit and loss, voting, compensation, authorizations and so on. An operating agreement can be an effective way to allow for stronger management.
Something else: It’s a good idea to, at a minimum, have an attorney review your documents. However, NBHS can prepare them for you and start a LLC, anywhere.
Some of the major factors to consider while choosing an LLC formation state are:
- Fees and filings that are required these filings include the annual reports, initial filings and other required information reports, such as a change of registered agent.
- The degree to which assets are protected is mainly important with an LLC because the states vary more widely with an LLC than with a corporation.
- Management simplicity and flexibility some states impose more requirements on LLC’s than others do.
- Tax obligations such as franchise taxes and conversely any tax inducements.
Taxes: Start a LLC, anywhere. By default, an LLC is treated as a “pass through entity” which means that, the profits and losses go directly to the owners. Depending on your country and other factors (for example, if you’ve been a US resident), your company or the individual owners might have to pay the tax on any US-based income though many countries have “TAX TREATIES ” with the US and are taxed at a reduced rate or do not have to pay them at all.
Whereas for a single-member LLC, this means that preparing a tax return is usually easy. You’ll need to file a Schedule SE for self-employment taxes and also a Schedule C to detail the deductions and revenues. As for a multi-member LLC, things get more complicated. For e.g., you will need to file a partnership return known as the 1065 and K-1’s for each member (this shows the allocations of profits, credits and losses).
Regardless, the pass-through feature means that you might be able to deduct losses against other income, which can also be a nice benefit. Oh, and if this is not as important, the LLC allows you to elect to be taxed as an S-Corporation or C-Corporation. In other words, it is a good idea to compare different methods to see which provides the maximum tax benefits.
Limited Liability: This is possibly being the biggest attraction of an LLC (keep in mind that you get limited liability protection from an S-Corp and C-Corp too). This means that you can generally guard your personal assets if there is litigation or bankruptcy of your company.
Granted, this is not supreme. If you are grossly inattentive, engage in a fraud or commit a crime, then you will likely not get partial liability protection. This is also likely to be the case with signing a lease or getting a loan from a bank (and finally, you will probably have to sign a personal guarantee).
But for the most part, limited liability protection is very powerful. Let’s accept the fact that, early-stage businesses are very risky.
Estate Planning: An LLC can be placed in a living trust, which can provide for tax benefits and better estate planning. But of course, this is a highly complex topic and really needs the help of a qualified attorney.
What are the drawbacks? No entity is perfect. And yes, the LLC is not perfect for all business types. Actually, one of the biggest drawbacks is that it is not particularly good for raising money, particularly from VCs. It is tough to structure protections in stock such as priorities with liquidations and dividends the governance tends to be too flexible (there is no board of directors) and even the traverse tax feature can be a problem (the reason is that VCs may have tax-exempt investors). So if you intend on uplifting substantial amounts of money, you almost certainly should instead look at the C-Corp. For the most part, the LLC will likely just make things too problematic and may even scare away potential investors.
And Online Legal Services: Yes, there are a number of companies, like the CorpNet, that can streamline the process of producing the necessary filings, maintaining ongoing reports and providing for services such as for a registered agent at an affordable rate.
Visit us at: http://nbhsllc.com/start-a-llc/. See how NBHS can help get your business started quickly and properly.