So, you have decided to dive into the digital business world and want to become and LLC or just curious?
An LLC is very popular among digital business owners, and it has several advantages that just “owning a business” does not, so let’s take a look at what an LLC is!
What is an LLC?
Let’s start with something technical: an LLC is a “Limited Liability Company.” So, there you have it. That is what an LLC actually is. (I promise I’m not going to stop there!)
The LLC is weird hybrid business entity created by governments to give a business owner the protection of a corporation without losing the personal touches. Look back at the technical definition: the LLC helps limit the liability of the owner/members.
Why Does Limited Liability Matter:
Well, if you run a digital business and the business gets sued, then the business is getting sued. For example, if the LLC doesn’t pay its bills, then the LLC will be named in the law suit. As an LLC, you are separate from your business. In most cases, you are personally not going to have some person trying to take your house.
*Little small side note: watch out for personal liability, like torts. The person and the LLC can be sued.
What are some key factors of an LLC:
1.Taxes are based upon which type of LLC you are.
A. The IRS treats single member LLCs just like a solo business. That means you file your LLC taxes with your personal using special forms.
B. More than one person is considered a Partnership for Tax purposes, unless the LLC files a specific form asking to be taxed like a corporation.
2. Your liability is limited.
Probably one of the biggest advantages of the LLC. Your liability is more limited than a solo business especially with debts!
3. You have to register with your State
States require you to register your LLC with the State. You actually have to file to become an LLC.
4. Know what is required.
More things are required of an LLC than a solo business. You have to apply and file to become an LLC. Here are two big differences.
A. Articles of Organization ( may be called something different depending on the State.
This is an outline of what you will be doing as a business. Helps the State establish your LLC.
B. Registered Agent
This is person is representing your company if the State needs to talk to your company or if the company gets sued.
Rather Watch a Video instead? Check it out below!
****Hey there sunshine! I just wanted to let you know that yes, I am an attorney, but I am NOT YOUR ATTORNEY. The information above does not put us in an attorney-client privilege contract type setting. Even though you are reading this, it doesn’t not mean that I am giving you legal advice as an attorney. You should seek counsel if an issue arises.