In light of all the new business formations, Tax Star Mobile, LLC would like to make it clear on what an LLC is. Just because you get a tax ID number and register it with the state doesn't mean you have an LLC. Taking shortcuts or getting your baby mama's sister's cousin Tracy to form your business WILL LEAVE YOU WITH NO PROTECTION AGAINST LIABILITY BECAUSE YOU ARE NOT FORMED nor OPERATE CORRECTLY.
What Is an LLC?
LLC stands for Limited Liability Company. An LLC is a US-specific business structure that offers the personal liability protection of a corporation with the pass-through taxation of a sole proprietorship or partnership. LLCs can be owned by one or more people, who are known as LLC “members.” An LLC with one owner is known as a single-member LLC, and an LLC with more than one owner is known as a multi-member LLC.
You don't typically use the title CEO for a multi-member LLC. This will suggest a different business structure. You have to establish the titles according to the roles assigned to each member. A solo LLC (a single-member LLC), you possess the full freedom to select a name or title that suggests your leadership role; for example you may choose to be termed as: President, Director, Principal, LLC Manager, Managing Partner, Executive Manager, Chief of Management, and so on.
Not a Federally Recognized Entity
LLC is a STATE REGULATED entity. The IRS has nothing to do with state legislation. It is a Veil of protection. A very thin one. If you don't follow all the rules, it can and will be penetrated. A lot of do-it-yourselfers skip the next process of picking a tax structure when applying for an EIN number, leaving them to be taxed as a partnership or sole proprietor.
Operating as an LLC
There are rules to follow in order to keep the veil of protection of an LLC. Because each state has different rules, it is better to consult with a Lawyer and read the rules and responsibilities provided by your state statutes or on the Secretary of State Website. The Secretary of State cannot give you legal advice as to how to form your business. It is suggested you consult with a professional to avoid double taxation or over taxation for your industry type, volume, and business goals.
You must also make sure that you follow through with your registrations with your city, county, and all the permits and licenses for your industry type. Failing to do this will leave you open to liability as it will be your responsibility to make sure all your I's are dotted and T's are crossed.
Other Business Formations
A limited liability company is just one of several business structures. Other common examples include:
Corporations
General Partnerships
Sole Proprietorships
LLP, Limitted Liability Partnerships
B Corps
S Corps
Cooperatives
Non Profit Corporation
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