What are the security laws regarding an LLC?
One of the best reasons for forming an LLC is because of the liability protection it offers. With an LLC formation, owners of the company are given liability protection so that their personal assets cannot be pursued. This means personal debts such as retirement accounts, savings, homes, etc. cannot be pursued to pay company debts for the LLC.
It’s important to note that if you structure your company as a sole proprietorship or general partnership, the owners of the company are legally considered the same as the company, thus exposing personal assets to be pursued to settle company debt.
LLC’s can also pass-through tax to the owners to be reported on their personal tax returns. This can simplify tax reporting as business taxes do not have to be paid at a company level. This simplicity helps to reduce paper work and makes filing taxes cheaper and less time-consuming.
LLC vs Corporations
- Less restrictions – Unlike S Corporations, LLC’s have very few limitations on who a can be an LLC owner or how many owners an LLC can have.
- Fewer compliance regulations – While corporations face yearly and on-going state and federal demands, LLC’s typically do not.
- Organization structure – When forming an LLC, you are free to create any structure agreed upon by the business owners. An LLC can be operated and managed by supervisors. Corporations however must have a board of directors who oversee important business matters and decisions.
LLC’s Require an EIN
Like most company entities, LLC’s require an EIN number in order to file federal taxes. GovDocFiling makes filing for an EIN number simple. Get started by visiting our online EIN application form. Our support team is available to answer any questions you may have about the filing process 24 hours a day, seven days a week.