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  • Writer's pictureEmpoura

Why an LLC?

All profits and losses are reported with the personal income taxes of each member (owner), also known as pass-through taxation.

  • This avoids being taxed both at the business and the personal level.

  • No personal responsibility for business debt & liabilities.

  • No restrictions on the number of members allowed.

  • The management structure is flexible.

  • Less annual paperwork and fewer administrative formalities compared to C corps and S corps.

What are some potential disadvantages?

  • Cannot sell stock in your company.

  • It’s generally not attractive to venture capitalists, even if you are going to require additional funding

  • Transfer of ownership may be difficult.

  • Owners may be held personally liable for the company’s debts if LLC is found to be operating in violation of its corporate formality requirements.

  • Do I register the LLC and if so, how and where?

  • You don’t have to file your LLC with the federal government, instead it filed at the state level, and Empoura handles that part for you

  • All states require potential LLC owners to file a substantial set of documents, typically called the Articles of Organization, in order to establish their business.

  • Empoura will take care of this process for you, saving you time, effort, and allowing you to focus on developing your business – not filing paperwork.

  • `It typically only takes between 7 - 10 days to form an LLC (register and filing you with the state) though the length of the formation process depends on the state in which you’re starting a business.

Read more like this in our free educational Community here.

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