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Understanding The Term «LLC»

Dave Mackay — Sat, 24 May 2008 15:59:12 +0000

LLC may not be a term that you are familiar with but it is a term that you need to be in great understanding of if you are a business owner. It is important to the liability and safety of your company.

Many people do not understand this term and so fail to understand the importance of an LLC and how it affects small business owners on a day-to-day basis. You do not want to be one of these people and this article is here to prevent that from happening to you.

What is the history of LLC's?

In the United States LLC's are relatively new. The first limited liability company first appeared in Wyoming in 1977. After a brief struggle with the IRS over the tax liabilities and laws another state followed suit. In 1982 Florida passed regulations allowing LLC businesses to operate. There was a brief lull in any activity due to shaky ground with the government and the IRS that continued and it was not until 1988 that other states began to pass legislation that allowed LLC's to operate.

How do I know if an LLC is right for me?

Generally small business owners are best suited for an LLC. You do not have to worry about having a board of directors nor losing any power in your company. There is a whole lot less paperwork involved and this can mean more time for you to devote to your fledgling business. Those first few years can be rough so you want to try to simplify things where you can and an LLC is the way to go for small business owners.

What is an operating agreement?

An operating agreement is an agreement made between the partners of a Limited Liability Company that basically sets forth how the business is going to operate. It is not a requirement by the state to have an operating agreement but it is a good idea so that everyone has clear expectations and understandings of what is going on with the company. It also helps partners know where each other stands in regards to future expansions of the business and where they would like to be in the future.

Are LLC's found throughout the world?

Yes, Limited Liability Company's are found throughout the world. Most of the other countries have had relatively new laws passed regarding the use of LLC's but it seems that the trend is continuing to grow at a phenomenal rate. Even the more economically challenged countries are turning to LLC's as a way to boost small business ventures.

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Introduction to Limited Liability Company Information

Dave Mackay — Sat, 24 May 2008 15:48:56 +0000

You may have seen it in many different places. Perhaps it has become so common you may not even notice it anymore. Normally denoted by L.L.C. or LLC, it refers to a limited liability company. Business owners have to decide what structure to use in their company formation. A LLC business has been considered a mix of a corporation and a partnership. There are similarities between a corporation, partnership and this type of company, meaning that an individual's personal liability is non-existent, much like a corporation, yet it also allows losses and profits to be handled much like a partnership, where the LLC will not be taxed but the taxes will be passed on to the owners.

LLCs are on the rise, as more and more company owners are discovering the savings, flexibility and liability protection it offers. With a smaller company it allows for the avoidance of personal liability, but at the same time, if the venture is not ready to be incorporate, then it is an ideal structure.

You may want to explore some of the advantages and disadvantages of forming a LLC. Most state regulations concerning the formation of this type of business do not reflect the more recent taxation changes and it can be quite a bit more expensive to form this type of company, versus a partnership or sole proprietorship. However, individuals have a limited amount of personal liability, the profits and losses have a different allocation and the IRS will now allow you to choose between being taxed as a corporation or as a partnership.

In recent years, all 50 states have adopted limited liability company laws, offering a very attractive alternative that most small enterprises, including the smallest home-based ventures, should consider. Even with all of the paperwork and at times, expenses involved, it is considered an ideal structure.

There are different ways that a LLC company may run its business. They can appoint one of their members to act and fulfill the duties of president or vice president, or any other position they see fit. Normally, a LLC is owned by its members, meaning that they can appoint managers to directly manage the company for them or they may apportion the duties among themselves. States will normally allow a limited liability company to structure their enterprise in whatever manner they choose.

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Form a Limited Liability Company

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Form a Limited Liability Company

Dave Mackay — Sat, 24 May 2008 15:37:20 +0000

If you have been thinking about different business structures and how they all compare, then you are not alone. Anyone in the business industry, whether they are financiers or merchants, has spent years trying to figure out ways to minimize or eliminate their losses and liabilities. Many now believe that to form a limited liability company is perhaps the best vehicle to help them achieve their goal. They may well be right, as it is not just a new idea. Many have already tried it and they sing its praises.

You may think that with all of the advantages an LLC business offers it must be a fairly difficult and expensive endeavor. However, you would be wrong, as most experts say that with all of the LLC information available, the process is much easier and less expensive than forming a corporation and it just may be the best decision you have ever made.

One of the first steps to be completed is to name your company; be sure to check with your state to see if your choice complies with your particular state's LLC rules. Some of the more common rules are obvious, such as making sure there is not another LLC on file with the same name. Of course, since you are going to form a limited liability company, the name must end with an LLC designator such as «Limited Liability Company» or even «Limited Company» or an appropriate abbreviation, such as «LLC» or «Ltd. Liability Co.» Most states have certain words that are prohibited, such as Bank, Insurance, City, etc.

Of course, as with everything else, there are some disadvantages as well. Corporations can be around forever, whereas an LLC business is dissolved when a member dies or undergoes bankruptcy. A sole proprietorship or partnership is a little less complex and includes less paperwork than a LLC, yet that certainly does not mean that the paperwork is not worth the effort.

When you form a limited liability company, there are steps that must be followed. While some are specific to certain states there are others that are common in all states. Typically, these would be to file the Articles of Organization with the Secretary of State and should include the company name, plus remember that most times it needs to end with an LLC designator. You will need to state the nature of your business or purpose and you will need to list names and addresses of the organizers. However, normally, you only need to list one.

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A Step by Step Business Plan is the Way to Go!

Chuck Arnone — Mon, 19 May 2008 21:12:04 +0000

A business plan is a formal statement of a set of business goals, the reasons why they are believed attainable, and the plan for reaching those goals. Business plans that identify and target internal goals, but provide only general guidance on how they will be met are called strategic plans. These plans may also target changes in perception and branding by the customer, client, tax-payer, or larger community. Learn how to create a winning business plan. Writing a business plan will force you to objectively develop and evaluate your tactical and strategic plans.There is no fixed content for a business plan. Rather the content and format of the business plan is determined by the goals and audience. For example,a business plan for a non-profit might discuss the fit between the business plan and the organization's mission. Banks are quite concerned about defaults, so a business plan for a bank loan will build a convincing case for the organization's ability to repay the loan.

In the U.S., many of the new jobs have been credited to small business. There are workshops available for everything from joint ventures to developing business ideas. A business plans handbook is a compilation of actual business plans developed by small businesses throughout North America. This handbook includes checklists and operating forms for small businesses. The FTC is an organization that works for the consumer to prevent fraudulent, deceptive, and unfair practices in the marketplace and to provide information to businesses to help them comply with the law. Employee Identification Number is a necessity even if you have no employees. Most wholesalers will ask for it. Most wholesalers will ask for this before you can do business with them.

Even if they do consider writing a business plan, they are often overwhelmed or confused by the planning process and never understand the value of this critical document. That is because most business owners fail to plan seriously for their own success. In the U.S, check local and state laws where you plan to do business. One of the many questions about business planning I receive is how long a typical plan is. The length of a typical business plan can greatly vary from 10 pages to a 100-page document. Growing your business using information technology and the internet takes careful planning and many businesses are unsure about how to proceed.

-- Creating your own business opportunities
-- Planning your personal road map to success
-- Pricing what you sell -- Money: what you'll need and where to get it
-- Making it legal
-- Who owns the business.

Finally, your plan may help you develop as a manager by giving you practice in thinking about competitive conditions, promotional opportunities, sources of finance, etc.

Business plans may be internally or externally focused and are used in some primary and secondary programs to teach economic principles. A plan is always a plus on your way to success. Business plans can be simple or complex -- it all depends on who is driving and where they want to go. These plans will still be needed for banks or investors, and most businesses need to go through that. A plan that has changes in perception and branding as its primary goals is called a marketing plan. Your business plan will become your road map to chart the course of your business and its success!

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Categories: Business, Entrepreneurs, Home Based Business, Management.

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