A limited liability company (LLC) is a flexible form of business enterprise that blends elements of a partnership and corporation. It allows for the limited liability protection similar to that of a corporation yet has the “pass through” tax benefits of a partnership. An LLC’s main advantage over a Partnership is the Limited Liability protection. The ownership structure and all other pertinent details of the LLC are set forth in the Operating Agreement. The operating is an internal contract between the members of the LLC, and set forth ownership interest, owner responsibilities, adding or removing members, terms for ending the LLC, and just about anything else the owners would like to have in there. It is generally not required to form the LLC. It can however be required by lending institutions and the like. With every purchase of the Corporate Kit, a customizable operating agreement is e-mailed in editable format.
* How many members/managers must I name to form an LLC?
In most states, one individual must be designated as either manager or member of the LLC in order to form the LLC. Some states do not require providing any name to initially form the LLC
* Is an Alien / Foreigner (non U.S. resident) permitted to own a Corporation or LLC?
There are no citizenship or residence restrictions for owning an LLC. Similar, the C Corporation does not have such restrictions either. However, an S Corporation does not allow non-resident aliens to own an S Corp (as opposed to any US citizen or resident alien).
*Are there any corporate formality requirements with LLC’s as there are with Corporations?
While corporate formalities are required with corporations, they are not required to have and maintain an LLC.
* Is the management of an LLC the same as with a Corporation?
A Corporation is managed by its Officers and/or Directors. An LLC on the other hand is typically managed by either its owners (known as Members) in which case its called “member-managed” or its Managers known as “Manager-managed.”
* Is there a Publication Requirement for Corporations and LLC’s?
Most states do not require any publication when a new entity is formed. Where required, IncBrothers provides publication services in all states that require it, for an additional charge. Often, the cost will depend on which county the entity is published in. Contact a representative today for a detailed quote. The following states require publication:
New York (LLC’s only)
Georgia (Corporations only)
Pennsylvania (corporations only)
Arizona (voth LLC’s and Corporations)
Nebraska (corporations and LLCs)
* What is the best State to form my business entity?
As a general rule, the best state to form your entity is the state in which the entity is located. There are exceptions. For instance, if you plan on having a large, multi-state operation, it may be wise to form in a different state. Banks for example often chose Delaware because various laws in Delaware are favorable to banks.
If your business has a substantial business activity and or physical presence in a state, the state will expect you to be registered with them and you may be required to register your company as a foreign (i.e. out-of-state) company with your home state, which may subject you to all of the taxes and regulations of that state. IncBrothers provides this service in all 50 states. Contact a representative today for a detailed quote on the cost of registering in a different state (or multiple states).