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| Do I need an attorney to form an LLC ?
No, an attorney is not a legal requirement. You can prepare and
file the articles of organization yourself; however, you need to be knowledgeable in the
laws of the State of Texas.
You can use our service to form your LLC and save money on attorney's fees. However,
if you are unsure of what entity would be most beneficial to your business, consult an
attorney or accountant.
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| What is a Limited Liability Company ?
A limited liability company is a separate legal entity created
by the state at the request of one or more individuals in order to conduct business. An
LLC combines the single level tax advantage of a partnership and the limited liability
protection of a corporation.
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| Why Should I form a LLC ?
LLC offers its members (owners) an important feature
that the limited liability, in other words if your business suffers an unfortunate
event creditors generally will not be able to come after your personal assets.
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| How many people are needed in order to establish an LLC ?
Most states including Texas allow one member LLCs. Massachusetts and the
District of Columbia require at least two members to from an LLC.
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| What is the management structure of an LLC ?
The owners of an LLC are called members, members are analogous to shareholders in a
corporation. Members may manage the LLC or they hire managers to do the job. After an LLC is formed members
need to meet and draft the Operating Agreement. The Operating Agreement is an agreement reached by the members
of LLC in order to define management arrangement and the members’ rights.
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| What is the tax situation of an LLC ?
This is one of the main advantages of an LLC, an LLC is normally taxed like a partnership,
meaning that LLCs’ income will be passed through to the members and it will be reported and taxed on their
individual tax returns. This eliminates the double taxation faced by corporations.
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| Should I form an LLC or S-corporation ?
Both from of business entities eliminate double taxation ie both offer
the benefits of pass through taxation. However an LLC is much more flexible and does not have
the restriction that an S-corporation imposes.
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| What are the advantages of an LLC ?
LLC offers a number of advantages that makes it ideal for
small and large business, some of the advantages are:
- Pass through taxation ie the income of an
LLC is taxed only once at the time the members file their
individual tax returns, very much like a partnership.
- Limited liability for the members, the
liability for members in an LLC does not go beyond the amount the
invested in the LLC.
- Flexible ownership and management
structure, there is no restriction on the type or number of
members in an LLC and members are free to choose the management
structure they like.
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What are the disadvantages of an LLC ?
- LLC is a new form of doing business and there are some questions still to be answered.
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