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The Nuts and Bolts of a LLC

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You have worked for someone else your entire life and you are ready for a change. Forming a business does not seem like an easy process and keeping up with one seems even harder. Starting your own Limited Liability Company (LLC) may be the answer for you. A Limited Liability Company is similar to a corporation in that it is a distinct and separate legal entity.

The first step is coming up with a name for your LLC. The name you decide to use all depends on the reason why you are forming an LLC. If you are forming a professional company, then you should stick with something that will be reputable. Yet, if you are starting a clothing company, then the name for your LLC should quickly grab the attention of consumers. The only restrictions on the name you choose is that you shall not use a name that would deceive the public nor can you select a name that is very similar to a LLC that already exists. In keeping this in mind, you can allow your imagination to run free.

Now that you have had time to come up with a name, then next step is receiving more guidance. As noted earlier, a LLC resembles a corporation. In this respect, an LLC can get a tax identification number and even open a bank account. There is no need to waste your time or money to form another company. The largest benefit is that you will not be held personally liable for the debts and liabilities of your LLC; therefore, if you are unable to make payments on your bills relating to your LLC and a court judgment is rendered against your LLC, you will not be held personally liable. Once there are no assets remaining in the LLC, creditors can not recover.

In regards to taxation, a LLC can be taxed like a sole proprietorship, partnership, or as a regular corporation. The good news is owners of LLCs will not undergo double taxation; whereas, a corporation pays a corporate tax based on its net income, in addition to stockholders paying income tax on dividends. As an LLC member, you will reap the benefits of only paying taxes once. What business owner wouldn't love that? Visit LegalCreation.com for more information.

Kevin Pratt is Attorney in Law in Georgia and focuses his practice in business law, corporations and limited liability companies, real estate transactions, tax deferred like-kind property exchanges, secured lending, and real estate litigation. Kevin Pratt has assisted hundreds of entrepreneurs in the creation of business entities such as Corporations, Limited Liability Companies, or Partnerships to facilitate their particular needs regarding, taxation, financing and limited personal liability. For more information please visit www.LegalCreation.com

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