If you are looking to start a business this year, selecting a corporate structure can be confusing and overwhelming. Do you register as an LLC, Corporation, or Sole Proprietorship? While each of these has its own benefits, we’ll discuss the benefits of an LLC specifically so you can gauge if it is right for you.
What is an LLC?
LLC stands for Limited Liability Company and is a business structure in the U.S. where the business exists as a separate and distinct entity from its owner, meaning the business is responsible for the company’s debts and claims, NOT the owner. For example, if you own a car dealership and a customer makes a legal claim against you or you default on a loan, neither the customer nor the debt collection company can come after your personal assets because they are protected by the LLC. Hence, an LLC protects the business owner from being personally liable.
Now, in order for the LLC to keep you personally protected, you must not “pierce the corporate veil” which requires you to maintain corporate form. Learn more about this in our recent vlog about The Corporate Veil.
Aside from personal protection, another feature exclusive to LLCs is the ability for all profits to be passed directly to the owners to be taxed as personal income. Essentially, this avoids “double taxation” of both the company and its individual owners.
How to Register an LLC
Registering an LLC is an exciting endeavor and provides a level of protection and legitimacy to your business. Here are the main steps to following:
- Choose one of the 5 types of LLCs (member-managed, series, restricted, anonymous, professional)
- Choose a business name
- Register a DBA (doing business as)
- File Articles of the Organization
- Designate a registered agent
- Create an Operation Agreement
- Obtain a business license/permit
- Obtain an EIN
- Open a business bank account (checking account + credit account)
Need Support Registering Your LLC?
If you are a Georgia-based business and want to ensure your business registration passes the legal check, book a strategy session with us here and we’ll support you through the process.
Looking for more legal know-how to protect and empower your business? Join The Driveway, our monthly legal membership program. Check it out here!
