LLC | Chamber of Commerce

Types of LLCs

Chamber of Commerce Team — Tue, 06 Dec 2022 16:47:49 +0000

Limited liability companies are popular business structures due to the fact that they blend the liability protection provided by incorporation while also maintaining some of the tax advantages of sole proprietorships and partnerships.

Additionally, limited liability companies are very easy to form, and the owners take on the tax obligations which they pay as personal taxes. However, there are various types of LLCs to choose from, and in order to make a well-informed decision, you need to know the pros and cons of each type of LLC.

The following guide will help you decide which LLC structure is ideal for your business.

Why is it important to form an LLC business structure?

The LLC structure comes with many advantages for small businesses. So let’s take a closer look at the many benefits of creating an LLC structure.

Protection of personal assets

The LLC or limited liability company is a legitimate corporate entity. Therefore, your personal and business assets are kept separate. So assets such as your family home, college funds, your kids or your family car, and any other personal property you have is protected in the event of legal action against your company. When compared to running a business as a sole proprietorship, this is a huge advantage.

Taxation flexibility

One of the advantages of forming an LLC is that you can choose to have your tax treated as though you’re an S Corporation. Alternatively, you can opt to have your business profits passed through to your federal personal income tax return.

Less paperwork

Forming an LLC requires fewer formation documents or paperwork and ongoing compliance requirements compared to the corporate structure. With an LLC, there is no need to nominate a Board of Directors, hold annual shareholders meetings, create annual reports or deal with other formalities usually affiliated with incorporating a business.

Professional credit

The LLC designator at the end of your business name offers credibility in the eyes of prospects, customers, the business community, and vendors. Ultimately, having the designation of LLC on your business name helps instill trust and confidence in potential customers.

Types of LLCs to choose from

Now that you’re aware of the advantages of forming an LLC, the only thing left to do is decide on the ideal type of LLC for you. Many business owners share similar needs, wants, and goals. However, the way we attain them tends to differ. Ultimately, you need to choose the most suitable LLC type for your business in order to reach your goals. So let’s take a closer look at the different types of LLCs and how they can benefit your business.

1. Domestic and foreign LLC

Domestic LLCs are businesses formed within the home state of the LLC owner. A foreign LLC, on the other hand, is when the business or legal entity conducts business in a state or region aside from its original or initial one. So, if you register your business in North Carolina but conduct business in Wisconsin, then your LLC is a foreign LLC.

Domestic and foreign LLC pros

Could be ideal if your home state is not suited to your business niche.
By operating in a different state where business is booming, you could generate much more profit.
By forming a foreign LLC, you may operate in a region or state that has better or more preferable taxes and business laws.

Domestic LLC and foreign LLC cons

You’ll need a business address in the foreign state that you’re transacting in to receive official mail on your behalf.
Since business laws differ from state to state, you’ll need to acquaint yourself with the state laws of the state you’re doing business in.
If you want to conduct business in a specific state, you need to file Articles of Organization and pay taxes in that specific region. However, you need to repeat this process for every single state that you would like to transact in, which will not end up being a cheap affair.

2. PLLC and LLC

There are lots of states that require professionals to have state regulatory board licenses to trade. Some of these professionals include legal advisors, accountants, and medical providers. A PLLC or professional limited liability company works in much the same way as any other LLC entity, where the risk to members, owners, and managers is prevented. It also provides a lot of flexibility regarding pass-through taxation and management structure.

PLLC pros

Members of a PLLC are not liable or accountable for the malpractice of another partner or owner.
A PLLC can choose to pay taxes as a pass-through entity or as a corporation. The owners of a PLLC may not be held accountable for any business debts or lawsuits.
PLLCs are relatively easy to perform, affordable to run, and also have far fewer requirements and compliance when compared to corporations.

PLLC cons

Many states do not recognize PLLCs as true business structures.
In order to form a PLLC, you need to be a licensed professional.
States that do allow PLLCs limit the formation of this business structure to certain licensed professional services.
Every member must have a license in the same profession in order to perform this business structure.
Financial institutes consider PLLCs as high risk and may need you to provide a personal guarantee to secure a loan.

3. Restricted LLC

One of the most business-friendly states in America is Nevada. The first restricted LLC structure was actually formed in Nevada on the 1st of October 2009. If you’re looking for lower tax rates when you need to transfer assets to family members, then this type of LLC would be ideal for you. However, you should note that it is only useful for individuals who have multiple properties and is not intended for traditional business dealings. In order to form a restricted LLC, all you need to do is tick the relevant box when filing Articles of Organization. Since the restrictions are quite flexible, this business structure seems to be growing in popularity.

Restricted LLC pros

Since assets can be liquidated, they cannot be taxed.

Restricted LLC cons

State law dictates the number of assets a restricted LLC can distribute to its members.
Prior to being able or permitted to transfer assets to family members, this business structure must operate for ten years after formation.

4. Anonymous LLC

An anonymous LLC allows you to create a legal LLC structure without having to provide the members, managers, and owners’ identities.

This type of business structure helps in reducing legal liability as well as protects your privacy by ensuring that your personal data doesn’t become a public record. If you would like to keep your investments private for any reason, then this could be the ideal LLC formation type for you.

Anonymous LLC pros

Anonymous LLCs are afforded the same advantages as regular LLCs, including pass-through tax advantages, flexibility, and limited liability protection.
An anonymous LLC will prevent anyone from accessing your personal data and using it to manipulate you.
Another benefit of anonymous LLCs is that it allows you to conduct your business without association, avoiding negative fallouts generated by the industry.

Anonymous LLC cons

With anonymous LLCs, you are still responsible for taxes.
While your identity is not made public, in the event that someone sues you or the LLC, a lawyer may decide to file a subpoena to gain access to your identity.
While an anonymous LLC is somewhat anonymous, it doesn’t guarantee 100% anonymity from the bank or Internal Revenue Service (IRS).

5. Series LLC

The series LLC is also referred to as SLLC and is made up of a parent LLC, that controls a number of smaller LLCs referred to as Series LLCs. Each series co its own managers, members, purpose, and assets.

Everyone is an unrelated entity under the umbrella series LLC. If one of the series fails its obligations or falls into debt, then the debt can only be enforced against that specific series.

Therefore, it seems to be an interesting option for LLC owners with several or multiple interests. This would be a good LLC type for real estate investors who have a handful of property investments and want to set each one up as a series under the umbrella LLC. Therefore, the instance of personal liability in the event that the market plummets is reduced.

Series LLC pros

Series LLCs are far less expensive and complex to startup, even though it acts as a corporation with subsidiaries.
The assets of the series is protected and independent from each other.
With a series LLC, you’ll be able to save on administrative costs as well as time since there’s one LLC registered only.
Only the parent LLC is responsible for filing tax returns.
You’re only liable to pay the umbrella LLC filing fee, as well as the costs to set up each series. The process is faster and more affordable than creating several separate LLCs.

Series LLC cons

Series LLCs is still a recent business structure, therefore, lots of questions need to be answered; for example, what’s the next step in the event the business runs into the ground?
Series LLC formation tends to be more expensive than regular LLC formation.
Based on your state of formation, you may or may not need an additional statutory agent for each series LLC.
Additionally, each LLC in the series must open a business or corporate bank account as well as separate accounting, which could send administrative costs soaring.

6. Single-member LLC

If you’re a solo entrepreneur or sole proprietor, then the single-member LLC structure could just be the ideal LLC type for you. This is due to the minimal paperwork and low setup costs involved as compared to other LLC structures. However, as is the case with every business structure, there are legal obligations that need to be adhered to when creating and operating any business. With the single-member LLC, you are the only member and, therefore, solely responsible for compliance in terms of taxes and debts.

Single-member LLC pros

You can pass ownership over to others.
The tax system is fairly simple.
You are allowed to add and approve new members.

Single-member LLC cons

You need to maintain a corporate veil, and this involves not mixing personal and business finances or acting illegally.
In order to prove that you’re following state goals, you’ll need to submit compliance forms.
When compared to starting a sole proprietorship, starting a single-member LLC comes with far more paperwork.

Read more: How to start an LLC »

How do LLCs differ from other business structures?

Let’s have a closer look at how LLCs are different from other business structures:

LLC vs. Corporation

LLCs are owned by one or more individuals, while corporations are owned by its shareholders.
LLCs may choose between being taxed as a partnership or corporation, while corporations are separate taxable entities.
LLCs have a minimum amount of formal annual requirements and are easy to maintain, while corporations need to hold meetings to maintain corporate status.

LLC vs. Partnership

One individual may own an LLC, while partnerships require at least two members to be formed.
LLCs may also have foreign businesses and individuals as active owners, whereas partnerships are not allowed to do so.
In order to form an LLC, you must obtain a Certificate of Formation with the state where your business is organized; however, when forming a partnership, you’re not required to file any paperwork or obtain any documents from the local government in order to operate legally.

LLC vs. S corp

LLCs may have an unlimited number of members, while S corps must have a maximum of 100 shareholders or owners.
S corporations can’t be possessed or owned by LLCs, partnerships, corporations, or many trusts, while this is not the case for LLCs.
LLCs are allowed to have residents and non-US citizens as members, while S corps are not allowed to have residents and non-US citizens as shareholders.

LLC vs. Sole Proprietorship

LLCs are legal entities formed at the state level and exist separately from their owners, referred to as members, whereas sole proprietorships are unincorporated businesses owned and operated by one person.
When forming an LLC, your personal assets are protected when it comes to claims against your company or business debt collection; however, with a sole proprietorship, there is no separation between you and the business, and therefore you have no personal assets protection.
LLCs must keep their business and personal finances separate or face the risk of losing their limited liability protection, whereas sole proprietorships do not need to separate personal and business accounts since they are considered one and the same.

FAQs

What type of structure is an LLC?

A limited liability company LLC is considered a separate and legal business entity. It is a legal structure.

What are the different types of business structures out there?

Depending on your goals and niche, there are various business structures available for formation, including C corporations or C corps, general partnerships, member-managed LLCs, limited liability partnerships or LLPs, manager-managed LLCs, and nonprofit corporations.

What is an LLC operating agreement?

An operating agreement is not just a key document but a legally binding one that limited liability companies make use of to outline how the company will be operated and managed, much like the bylaws. Ultimately, the operating agreement helps to set down the guidelines, duties, and responsibilities of each member of the LLC or limited liability company. This streamlines the operations and helps avoid disputes.

Where do I register my LLC?

Irrespective of the type of LLC structure you’ve decided on, you need to register your business with your secretary of state’s office.

How can I avoid double taxation?

One of the best ways to avoid double taxation is to register your business as a pass-through entity. In this way, profits go directly to the owners and are not taxed at the corporate level but more on the personal level.

The post Types of LLCs first appeared on Chamber of Commerce.

Best LLC Services (Reviewed and Ranked 2023)

Chamber of Commerce Team — Tue, 19 Jul 2022 21:14:14 +0000

Starting a business? Our number one pick for registered agent services is ZenBusiness.

ZenBusiness	Low cost Quick turnaround Expert service and support	Visit ZenBusiness
Northwest Registered Agent	Same day filing service Affordable pricing Strict ethical code	Visit Northwest
Incfile.com	Your first year is free Wide range of services Technical support	Visit Incfile

The decision to start your own business can be an exciting time as you prepare to bring your dreams to life. But the process can also be overwhelming as you work through all the necessary steps, paperwork, and planning, including forming your LLC through the state.

While some people choose to do this on their own, many of the over 5 million LLCs formed yearly are helped by an LLC service. These services can make the process easier and take the burden off of entrepreneurs, but there are also many to choose from. Read on to learn how LLC services can help you and which ones are the best.

What are LLC services?

LLC services help a business start and grow.

Businesses that offer LLC services often called business formation companies, can help owners set up an LLC at the state level. In addition, companies can help a business file reports, pay state fees, serve as a company’s registered agent, and some even offer legal advice.

Top 5 best LLC formation services

1. Northwest Registered Agent

At Northwest Registered Agent, each customer is provided a Corporate Guide, a highly trained support agent who works with their account. This continuity makes it easy to follow up on your needs and go through the ordering process. Northwest only offers one plan, which includes formation, registered agent services, access to your corporate guide, and a business address. They do not offer operating agreements, marketing tools, or worry-free compliance.

2. ZenBusiness

With straightforward and affordable packages for LLC formation, ZenBusiness is known for its responsive customer support and simple structure. The basic package includes a free operating agreement and a CPA assessment, though EIN (employer identification number) registration and registered agents have an upcharge. If you do choose to use a ZenBusiness registered agent, their service is one of the highest-rated on the market.

3. IncFile

For users who want to manage their business in an online interface, Incfile is a top choice due to its user-friendly online dashboard that helps to track deadlines and compliance tasks. Their quality customer support is a benefit, and all packages include a year of registered agent service for free. Premium plans will include web domains and expedited filing.

4. Swyft Filings

Swyft Filings is a team of business formation professionals who focus not just on formation but on the continuing support of each business. All plans include lifetime customer support and free tax consultation to help ensure you are in compliance with the IRS. Swyft Filings offers a huge amount of premium services, even helping with business licenses and permits.

5. BizFilings

With a focus on incorporating businesses, BizFilings seeks to ensure customers are as informed as possible through their team of incorporation specialists. This team stays with you through your business’ lifetime and offers services like customizable operating agreements and ongoing registered agent services.

What is an LLC?

An LLC, or limited liability company, is a type of business entity in the United States. Though an LLC is formed at the state level, with varying processes and rules in each location, the concept exists across the country. In fact, 35% of small businesses in the country are LLCs. But why do so many business owners choose this structure?

Liability protection

The main benefit to an LLC is that they provide protection for the business owner when it comes to debts and liabilities associated with the business. Personal assets have more protection under an LLC.

An LLC is an intermediary between sole proprietorships (in which the owner and business are legally one and the same) and a corporation (in which the business is an entirely separate legal entity).

Hybrid business structure

An LLC is a hybrid entity. Owners benefit from liability protections that mean if the business is sued, bankrupted, or finds itself with other obligations and liabilities, they cannot be pursued for repayment. At the same time, the taxation structure of an LLC is similar to that of a corporation, with owners not paying taxes directly. Profits and losses are passed on to members, who report them on individual tax returns.

Simple set up

LLCs are typically governed at the state level, but the process of creating one is similar in all locations. This typically involves steps like naming your business and ensuring the name isn’t taken, filing Articles of Organization, paying a fee, and obtaining tax identification.

Read more: How to start an LLC »

What services qualify as LLC services?

A true LLC service will have end-to-end coverage for everything needed to create and operate an LLC. As you evaluate options, be sure that all of the below services are offered.

LLC formation package

Each state requires certain paperwork to be submitted to form an LLC. This can include business formation services like filing formation documents to register your name and/or a fictitious name, the application itself, and supporting documents like Articles of Organization. If you need guidance on the contents of these articles, they may also provide expert advice.

An LLC service will assume responsibility for ensuring these are filled out properly based on the information you provide and appropriately submitting them to the state. The state filing fee may or may not be included depending on your chosen provider.

Operating agreements

Along with the Articles of Organization, many people choose to create an operating agreement when they start their new business.

While an LLC is not generally required to file this agreement with the state, it can be a helpful way to ensure everyone is on the same page. An operating agreement will spell out things like how to resolve conflicts, including the potential dissolution of the company.

LLC services will typically offer operating agreement templates that you can use and plug in your information and wishes.

Along with templates, you may also be able to work with an expert to craft a solid operating agreement based on best practices.

Registered agent services

Every state requires that a registered agent is listed on the company formation papers. This registered agent is an individual or entity who will receive tax and legal documents on behalf of a company and ensure the right people receive them.

The company’s owner can serve as the registered agent, but some choose to use a commercial registered agent through an LLC service.

Why? A commercial registered agent can often simplify communications and offer peace of mind to owners who are often out of the office. A commercial registered agent is also available during regular business days and hours, which is required. For busy owners who have irregular schedules, a commercial agent is ideal.

Some service providers offer a free registered agent service to companies in their first year. It provides a hassle-free option for those looking to start a new company or an online business.

Read more: What is a registered agent? »

Starting a business? Our number one pick for registered agent services is ZenBusiness.

ZenBusiness	Low cost Quick turnaround Expert service and support	Visit ZenBusiness
Northwest Registered Agent	Same day filing service Affordable pricing Strict ethical code	Visit Northwest
Incfile.com	Your first year is free Wide range of services Technical support	Visit Incfile

Business compliance

Once a new LLC has been formed, the paperwork and upkeep are not over. Most LLCs and nonprofits have to file annual reports each year with the secretary of state to keep their status and remain in good standing with the state.

These reports include things like meeting minutes and financial disclosures that demonstrate they are operating in compliance with the definition of an LLC and all related rules. An LLC service may be able to manage this paperwork and all related tasks so that your business remains in compliance without it being another task on your plate.

What are the benefits of using LLC services?

Experienced assistance

LLC services are staffed with people extremely knowledgeable about the process, including the formation and maintenance of the businesses.

Each state has unique restrictions that can be difficult to keep up with on your own, along with the need to maintain compliance standards and fee schedules. The experts at an LLC service can not only take over some of these tasks but provide expert guidance throughout the process.

Whether it is legal services or information about which state you should start a business in, relying on people with knowledge and experience can help you make the right decisions upfront.

Save time

The last thing most business owners need is another task to take care of. While you will be involved in the formation process for an LLC, service takes on some of the more tedious elements like filling out paperwork and submitting applications. Without worrying about the ins and outs of the process, you’re free to focus on the other steps necessary to start your business.

Variety of services to use as the business grows

Most people will come to an LLC service seeking help with the formation process, but having a trusted vendor who can perform other services is helpful later on. Working with an LLC service from the start makes it easy for them to manage your ongoing compliance and needs. If your business grows and you need other services or to expand into other states, the existing relationship with an LLC service will simplify your next steps.

Marketing tools

Some LLC services offer tools for small business owners that go beyond formation. As a part of securing your company name, they may be able to ensure your domain name is available and reserve it, or even work on building out your website and advertisements.

Direction on funding

Funding a business can be one of the most overwhelming parts of starting a business. While LLC service providers do not fund businesses themselves, many will offer information on funding sources and approaches to take. They may also provide guidance on things like taxation and profit and help you set up a business bank account.

How to pick a company that’s right for you?

Experience

While being around a long time doesn’t automatically make a company the best, look for an LLC service with some history in the business. This experience will be one of the main assets you get from working with the service, so you want to be sure that the people you work with are knowledgeable. You should be able to find customer reviews from recent years to demonstrate that they have been effective and have real-world examples to highlight.

Consider visiting Trustpilot, an online review site that should hopefully have positive reviews and customer feedback for the online LLC formation service that you have in mind.

Services offered

Help with forming your LLC will be the most vital service you look for, but the more breadth here, the better. You may not know what your business will look like in the future and what services you may need. It will be easier to keep everything with one vendor rather than spending time searching for additional ones to do things like website building and marketing.

Cost

Prices for LLC services can vary widely depending on what services you need and your plans. Most will offer a basic plan with affordable pricing that includes LLC filing services with add-ons available for separate fees. Premium plans are more likely to include things like an LLC operating agreement and EIN registration (also known as a federal tax ID number). You’ll want to choose something that fits your budget while still bringing value.

Customer support

In addition to ensuring a company has knowledgeable staff with real-world experience, how you access that support will be important. Your experience with turnaround time, ease of contact, service hours, and general demeanor can impact your experience of an LLC service.

FAQs

How much does it cost to start an LLC?

The amount of money it takes to start a business will depend on your location, business, and needs. According to the U.S. Small Business Administration, most small businesses cost between $2,000 and $5,000 in order to get off the ground. This can include things like the cost to form an LLC, as well as purchasing materials and marketing costs.

How much do states charge to officially form an LLC?

Each state determines the filing fee for an LLC and annual fees, so it can vary widely by state. Formation fees can be as low as $40 and as high as $300, and some states have no ongoing fees but they can reach $4,500 annually depending on your business. Business owners will also need to pay for any outside consultation or services they utilize.

What’s the best state to start an LLC in?

You can form a business in any state, even if it is not where you reside. Delaware is the most popular state for LLCs because it is business-friendly, has low taxation, and has fast filing for a fee of only $90. Wyoming also offers low price fees and great business tax benefits, as well as the nation’s strongest asset protection.

Is there a monthly fee for an LLC?

There is no monthly fee for an LLC, but most states have annual costs associated with maintaining the status of a business. Annual reporting fees are the biggest cost and can range from $20 a year to over $10,000. Annual franchise tax can also be applied to LLCs and can be as low as $250 per year.

Are LLC services ideal for startups?

Yes, LLC services are often the best choice for startups and people new to owning a business. Instead of spending the time to learn everything about formation and state compliance, an LLC service allows business owners to spend their time focused on their business while ensuring all the necessary processes are in place.

What other providers offer incorporation services?

Beyond the list above, incorporation services are available through Inc Authority, My Corporation, MyCompanyWorks, Rocket Lawyer, MyCorporation, and Legalzoom.

Can I start an LLC on my own?

Yes, anyone can form an LLC without a service or a lawyer to help them. However, it is best to engage someone who has knowledge of the subject and can ensure everything is done in compliance with state law. Using an LLC service allows you to ensure that your business is formed properly from the start.

Do I need a registered agent to start an LLC?

Yes, all states require that a registered agent is listed in the Articles of Organization when forming an LLC. You can be the registered agent for your own business or can list another individual. Commercial registered agents can be used to ensure nothing is missed and everything is handled in a timely manner.

Do I have to have an operating agreement to start an LLC?

No, operating agreements are not required to be recognized as an LLC. However, it is best practice to have one in place before starting to do business to ensure disputes are handled properly. Most LLC services will provide a template of operating agreements or help you to craft one based on their knowledge.

What are Articles of Organization?

The paperwork needed to create an LLC is called a certificate of formation or more commonly, Articles of Organization. These articles include information on the business owners, the principal place of doing business and purpose of the business, the business name of the company and any DBA designations, and the intended business structure. Other details may be necessary depending on state laws.

The post Best LLC Services (Reviewed and Ranked 2023) first appeared on Chamber of Commerce.

How to Properly Dissolve an LLC

Chamber of Commerce Team — Tue, 07 Jun 2022 02:29:18 +0000

Deciding to end your limited liability company (LLC) is a tough one to make. No matter what the reason is behind your decision, there are certain steps you have to take to dissolve an LLC.

Properly dissolving an LLC is important for a couple of reasons. First, it ends your liability related to the business. In the eyes of the state, a dissolved business is no longer responsible for filing annual reports, paying filing fees, or submitting business tax forms.
Second, it gives you closure. Going through the correct process means everyone is paid the appropriate amount. All debts are settled and your name keeps a good reputation.

We’ve created a guide for you to follow should you need to dissolve your LLC. It answers many questions and helps you avoid pitfalls. It can also help you move through the dissolution process with confidence.

How to dissolve an LLC

The decision to dissolve your LLC isn’t yours alone. It is one to be discussed by board members. There should be a long time of questions and discussions before you move forward. There could be several reasons for dissolving an LLC. Some include:

The small business isn’t succeeding as hoped.
Board members can’t work together anymore.
The business never opened.
The business was sold.
The death of a business partner occurred.

Once you’re ready to close up shop, here are the steps to follow:

1. Follow the operating agreement

The most important aspect of dissolving the LLC is to follow the operating agreement. This is an agreement all board members signed when the company was first formed. The agreement lists how bills are to be paid, how profits and LLC assets are to be disbursed and both the circumstances and the manner of ending the business.

Although this type of agreement is never filed with the state or federal government, it is a legally binding agreement and failure to follow it has legal consequences.

2. Take a vote

Some operating agreements have a “dissolution trigger,” like the death of a business partner. Even so, board members must participate in a voluntary dissolution. The operating agreement should have a procedure outlined for how to conduct a vote including notifying all board members, when board meetings for dissolution can be held, any legal advertising, and other procedures.

If the board gets a majority vote for dissolving the company, it’s important to put the motion and vote in the company minutes to maintain business records.

3. Let others know

Employees

Employees should be the first to know once the board has voted to dissolve a business. There isn’t a set way to tell them but it’s best to tell them in person and allow them to ask questions.

Many employers wait until the business is close to the end date to announce it to employees, but be mindful of your staff’s feelings and income. They need a timeline to prepare and look for another job.

One reason employers delay telling employees is because they fear all will leave for other work and that would hurt the business trying to finish up contracts and projects in its final days. A way to avoid that possibility is to offer larger bonuses and help in job searches for anyone who stays until the end.

Vendors

Vendors should be told soon after the vote is taken so they know they will stop deliveries at some point. You will need to have an end date for them to stop all orders and have a final settlement.

You may need to negotiate with vendors depending on the contract you signed. Any penalty clauses will need to be part of the debt settlement and the board must be notified of penalties.

Customers

You should let customers know pretty quickly about your plans because word will get around and they will feel betrayed if they don’t hear it from you. It helps to give them an end date so they will continue doing business until the final day.

Depending on your business and the timing of your dissolution, you may want to start some closeout sales of inventory.

4. Settle tax matters

The first order of business in a dissolution of an LLC is to settle all tax matters. Typically, states won’t allow you to continue with your dissolution unless you’ve done this step.

File your federal tax forms first. When filing paperwork, have your accountant draft a letter stating this is the final tax return for the business. File the state taxes in the same manner. Both should send you a letter stating you’ve satisfied any tax liability.

You will submit a copy of the letter or certificate with your dissolution paperwork to the state.

5. Notify state offices

Every state is different and each governs corporations uniquely. Go to the Secretary of State website for your state to see what rules apply when dissolving a business. You may find that you need to contact several state departments to notify them of the decision.

You may owe money to any number of departments, depending on how you pay them throughout the year. Some agencies you will need to contact include:

Department of Labor
Sales and Use Tax Commission
Any Professional Boards

The Department of Labor is important because some states require you to file quarterly or twice yearly employee tax reports. You need to notify them when you shut down the business in writing so you won’t need to file any more reports or pay additional taxes beyond the end date.

Many states require businesses to pay a sales and use tax if they sell taxable goods. You will need to notify them of your end date to avoid paying more than you should.

A number of states also require certain industries to hold professional licenses, such as hair stylists and chiropractors. You will need to contact them to notify of your end date and ask for procedures for those professionals to continue to hold their licenses independently.

6. Settle debts

Settling debts is probably the most agonizing part of dissolving a business, particularly if the business failed. Organize your debts by priority and begin to pay them off.

One thing that should be discussed early on with the board before the dissolution vote is the amount of debt owed and how long it will take to resolve it. That will affect your end date for the business because you can’t dissolve a business with debt.

The LLC may need to function for a while until all the debts are paid.

7. End contracts

It’s time to formally end all contracts once you settle all the business debts. This is important because it means the vendor or client can’t come back later claiming something is unfulfilled.

8. File a Certificate of Dissolution

You need to file official paperwork to dissolve the business with the state. Just as you filed formation documents, usually called Articles of Organization, there’s LLC dissolution paperwork called a Certificate of Dissolution or Articles of Dissolution.

An Article of Dissolution is a form filed with the state certifying that you are dissolving the business entity. This removes any liabilities by the state for annual registration fees and taxes.

While every state is different, many require you to file the form online just as you filed your registration online. Some require a fee to file dissolution paperwork although the fee is usually minimal. There may also be a waiting period before you get your final certificate for dissolution.

The exact guidelines for how to file the paperwork and what to include will be on the Secretary of State’s website.

Processing times vary, but if your company is in good standing, you’ll likely wind up with an approval in a week or so.

9. Terminate employees

The way and timing of letting employees go may depend on how long it takes you to dissolve your LLC. You may have to first wind down business contracts and other matters. However, any remaining employees should be let go when you formally file the paperwork.

This means giving them any severance packages, recommendation letters and outlining how they can obtain benefits while looking for other work. This will include filing for unemployment and how to keep health benefits until they return to work.

You need to make this as seamless as possible so they can move on quickly into other employment. That may mean having a list of suitable jobs nearby ready to give to them in their exit package.

You will pay your final payroll tax once you’ve said goodbye to your last employee.

10. Distribute remaining assets

One of the final things you will do in dissolving your LLC is to distribute any assets. Assets include profits, money in other holding or stock accounts, land, and equipment. Typically, dissolution follows the sale of non-monetary company assets like land, equipment, inventory, and stocks so you should have all cash at this point.

This is assuming there is profit after all taxes and debts are paid.

11. Final miscellaneous items

Many little details exist to close a business. You must contact local and state authorities to let them know you no longer need business licenses or permits. That shouldn’t involve any more payments as long as you were up-to-date before.

With all financial matters taken care of, one of the final steps in dissolving your LLC is closing all the business bank accounts. That may involve taking some paperwork to the bank but is a pretty straightforward process.

The final step to closing your LLC business is filing to end your Federal Employee Identification Number and your State Tax Identification number. This is typically a written request.

Consider hiring a dissolution company

Just as there are many commercial companies that help you incorporate your business, there are companies that can help you dissolve it. Many times the same companies that got your FEIN or helped you pick a business name also help file all the paperwork for dissolution.

There are advantages and disadvantages of hiring a professional to do the task. The advantages are it will be done to the letter with nothing overlooked and it will take the stress off of you.

The disadvantages are that it takes you out of the loop and you may want more control. Plus, it will cost some and your business might need its assets to pay debt and distribute what board members expect.

FAQs

What if my LLC was never functional?

An LLC that never operated still must follow all of these guidelines, especially those listed in the LLC operating agreement.

What if we didn't have an operating agreement that outlines dissolution?

LLC members that didn’t create an operating agreement must follow state laws where it is located.

What if my business operates in several states?

You will file your IRS tax return and all state tax returns. You will need to settle all debts for every state, end all contracts and then file for dissolution in every state where your business is located.

Can my LLC be dissolved involuntarily?

Yes, your LLC can be automatically dissolved in two separate ways. The state may administratively dissolve it if you fail to renew your registration. States have different requirements and dates for when you pay the fee, so check in your state.

Your LLC can also be automatically dissolved by a court, known as judicial dissolution. Usually, the CEO will file for a request because either the board is deadlocked on dissolution, there’s been some type of misconduct, or the board can’t agree on how the business is supposed to work on a daily basis.

Do I need a lawyer to dissolve my LLC?

No law requires business owners to use a law firm but you may want to consult one depending on your situation. A lawyer may be able to guide you through troubling waters like dealing with board members or fulfilling projects until you are closed. A lawyer may also be able to help negotiate contractual issues and employee severance packages.

What’s the difference between a cancellation and a dissolution?

A cancellation is what the Secretary of State does to approve your paperwork and remove any liability of the business along with your powers, privileges, and rights. Most states issue a Certificate of Cancellation upon approval. A dissolution is what you and the board members do to work through the process of ending the business.

The post How to Properly Dissolve an LLC first appeared on Chamber of Commerce.

How to Start an LLC in the US as a Non-Citizen

Chamber of Commerce Team — Mon, 06 Jun 2022 11:34:01 +0000

Whether you live abroad, are a non-resident, or reside in the United States as a non-citizen, you still have the ability to open a business in this country. LLCs, or limited liability companies, are a great choice for this scenario as they are easy to form and are simple to create.

While the steps don’t change for non-citizens, there may be some additional hurdles to ensure you have all the necessary documentation and information. Once you have ensured everything is in compliance with the state and country’s regulations, you will be able to have a U.S. business of your own.

Who can own an LLC in the US?

The category of non-US citizens is broad, but there are specific people considered foreigners when it comes to starting an LLC in the United States. Non-citizens can form an LLC if they live in the United States or in another country as long as they meet the Internal Revenue Service (IRS) guidelines.

The IRS refers to anyone who is not a US citizen as an “alien,” a term that refers to anyone born in another country who does not hold US citizenship. This can be a resident alien, who lives in the United States and passes either the green card test or the substantial presence test. Both types of aliens can form an LLC, with the main difference being how you pay taxes.

To open a U.S. LLC, you do not need to live in the United States or be physically present, as long as you can complete the right steps and access online forms.

However, it is important to know that owning an LLC does not authorize a person to work in the United States unless you have completed the proper steps to obtain a visa and work authorization.

Why choose an LLC

LLCs are a very common choice for these individuals due to their structure.

Asset protection

The main draw of an LLC is that it offers personal asset protection to the business owner. Even if your business is brought into a lawsuit, has a significant financial obligation, or files for bankruptcy, your personal money and assets will not be used to fulfill these debts. This protection allows you to start a business without great personal risk.

Simple maintenance

Compared to something like a US corporation or a c corporation, the work required to maintain a U.S. company that’s an LLC is less intensive. You will not need to elect a board of directors, hold shareholder meetings, or record meeting minutes with an LLC. While there are other requirements to fulfill for a foreigner starting an LLC, this requires less paperwork and upkeep than other structures.

Economic access

Starting an LLC in the United States is a great way to become a part of the world’s largest economy and gain access to a large market. For some industries, a formal operation in the United States can lend credibility that helps a business grow and thrive.

LLC tax structure

While LLCs maintain some benefits of a corporation, like asset protection, they are able to benefit from a pass-through taxation structure. This means any profits and losses associated with the business are passed through to the members of the LLC, avoiding double taxation.

How to form an LLC as a non-US citizen

The majority of the process to start an LLC as a foreigner is the same as it would be for a United States citizen, but there are a few slight differences. The entire process is outlined below.

1. Choose a state

Most people start a business in the state where they reside, but this may not apply when you live in another country. If your business will have a physical presence or an office, it is best to form an LLC in that state in order to avoid additional complexity. If this is not the case, you can choose any state.

It is advisable to choose a state without state taxes so that you only need to worry about filing federal taxes. For this reason, Wyoming, Nevada, Florida, and Delaware are popular options. Remember that each state has its own tax rates and laws as well as laws about businesses like what licenses you may need.

2. Name your LLC

States will have different rules about what a business can and cannot be named, but it is universal that you must pick a name not already in use. Each state may have a registry that you can search to ensure you are not using a name that already exists, and it can be helpful to search for things like URL availability or nationwide trademarks as well.

An LLC will need to include the phrase “limited liability company” or an abbreviation in its formal name.

3. Find a registered agent

A registered agent is a person or business that sends and receives legal documents and other paperwork on behalf of a business. In many cases, the person starting an LLC is the registered agent for the business, but if you are not in the country, this is not an option. If you do not have a contact who is a resident of the state where you are filing, you can use a registered agent service to hire one on your behalf.

4. File your LLC with the state

To officially form a business, you must file all relevant documents with your state. The most common version of these documents is known as Articles of Organization or a Certificate of Formation. Your documents will outline the organizational structure of your business and provide all the basic information that the state requires.

5. Create an LLC operating agreement

Most states do not require an operating agreement as a part of the filing requirements for an LLC, but it is recommended to complete one. An operating agreement is a legal document that will outline ownership and operating procedures for an LLC, which ensures everyone is in agreement and reduces the risk of future conflict. This can be especially important if one member of an LLC is not physically present while others are.

6. Obtain an EIN

An Employer Identification Number is a nine-digit number issued by the IRS that is used to identify a business for the purpose of federal taxation. The process to apply for an EIN online is simple, but will require a Social Security Number (SSN) or Individual Taxpayer Identification Number (ITIN) as well as a US address.

For non-US resident business owners, you can submit an application through fax or mail. This will allow you to choose an option to designate yourself as a foreigner and circumvent the requirement.

7. Get a US mailing address

Many tasks associated with your business will require a physical mailing address. If there is a physical office in the state, you can use this address for all necessary paperwork. But if you do not have an office, you will still need to obtain an address. A P.O. box is not considered sufficient for this requirement.

Some online services like Earth Class Mail will provide a real address and even scan mail for you to view when it arrives.

8. Open a US bank account

This step can be complex and require travel to the United States, as banks need to avoid any potential money laundering scams and have requirements in place for this purpose. Once you have your EIN and have formed your business, contact the bank of your choice to ask what documents will be required to start an account in your situation. You will likely need to visit the United States to complete this process.

If you have a personal bank account in the United States, your bank may allow you to open a business account without travel, but this is not guaranteed. You do not need to use a bank in the same state as your LLC, which can offer some flexibility.

Taxes as a foreign-owned LLC

Any LLC that does business in the United States will need to file and pay federal taxes, no matter where the entrepreneur resides. Most states will require the same if they have any taxes at the state level. The way these taxes are calculated can vary based on the way your LLC has been formed.

In a single-member LLC, the pass-through entity structure of the business means that the owner’s income tax statements will reflect all profits and losses of the business. IRS Form 1040 is where this is typically reported for citizens and resident aliens, and non-resident aliens will need to use IRS Form 1040NR.

Non-resident aliens will also need to file two additional forms: Form 5472 and Form 1120. While these are typically only filed by corporations, a foreign-owned entity will also need to file them in order to allow the IRS to keep a close eye on the business. Even if the business has no income to report, these must be filed annually.

A multi-member LLC will be considered a partnership for tax purposes. This means the LLC will need to use Form 1065 and Schedule K-1 to report profits and losses for each partner. These forms replace Forms 5472 and 1120. If the LLC has source income connected to a US trade or business, they may also need to complete additional forms 8804 and 8805. Each owner will continue to report their share of profits on personal tax returns.

Taxes as a foreign-owned LLC can be complicated, so it may be a good idea to work with a tax expert for guidance.

FAQs

Can foreigners start an LLC in the US?

Yes, anyone can open an LLC in the United States. The process and tax requirements will vary based on if you reside in the US, what your citizenship or resident status is, and how many owners the business has. However, starting an LLC in the USA does not mean the owner can move here to conduct business automatically.

Do foreign company owners pay US taxes?

Yes, any LLC that has been formed in the United States will need to pay all federal and state income taxes applicable to the business. This includes personal income taxes, even if the person is not typically required to file in the United States.

All additional filing requirements that US business owners must meet, like filing an annual report, are also applicable.

Can I use my business address as my registered agent?

Technically, you can use your company’s name and address as a registered agent when forming an LLC. However, it may not be feasible as someone would have to be physically present at the place of business during standard daytime hours to accept and forward government documents. Most foreign LLC owners choose to use a registered agent service to avoid this.

Does my LLC need a US mailing address?

The legal address of your business can be anywhere in the world and you do not technically need a physical mailing address in the United States. But to do things like open a business bank account or take out a loan, most institutions will require a physical address that is not a P.O. box.

Do I have to travel to the United States to start an LLC?

The process of starting an LLC can be done entirely via online forms, fax, and mail without the need to be physically present. A registered agent service can allow you to receive mail and documents without being physically present. However, opening a business bank account in the United States typically requires you to visit the bank in person, so a trip is often necessary.

Can I work for myself if I start an LLC in the US?

You would need to follow standard regulations to work in the United States, such as obtaining a green card or a work authorization and visa. Owning an LLC does not allow you to claim employment in the United States and reside in the country without all formalities taking place.

The post How to Start an LLC in the US as a Non-Citizen first appeared on Chamber of Commerce.

How to Start an LLC in Wisconsin

Chamber of Commerce Team — Mon, 14 Sep 2020 19:48:30 +0000

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Starting an LLC in Wisconsin step-by-step

1. Select a name for your Wisconsin LLC

Follow naming requirements

There are 2 major guidelines to follow when naming your LLC in the State of Wisconsin:

An LLC’s name must be distinguishable from the names of existing business entities on file with the Wisconsin Department of Financial Institutions.
An LLC’s name must contain one of the following phrases or abbreviations: “Limited Liability Company”, “Limited Company”, “LLC”, or “L.L.C.”

Check the availability of your LLC name

Confirm that your LLC name is available in Wisconsin using the Department of Financial Institutions Search Corporate Records Name Availability tool.

Reserve your LLC name with the Department of Financial Institutions

You can protect your chosen LLC name from being used by another Wisconsin business entity before you can file Articles of Organization by reserving it with the Department of Financial Institutions.

File a Name Reservation Application with the Wisconsin Department of Financial Institutions by postal mail (there is no online filing option) to reserve a name for up to 120 days. The filing fee is $15.

2. Designate a registered agent

As in every U.S. state, forming an LLC in Wisconsin requires the appointment of a registered agent service to handle state and federal legal documents and service of process on the business’s behalf.

The registered agent must either be a state resident or business entity with a street address in Wisconsin OR if the individual or business is based out-of-state, they must have a business office in Wisconsin.

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Our picks of the best registered agent services

ZenBusiness

There’s no need to stress about filing paperwork when you work with ZenBusiness. This company offers a great variety of LLC services, the focus of which is to ensure your business is set up correctly with the proper paperwork filled out and delivered to the right branch of your state government. Of course, ZenBusiness does charge for their services, but customers say they get the most bang for their buck.

Northwest Registered Agent

Starting a business requires a lot of state-mandated paperwork, which can be confusing for new business owners. Northwest offers business services that can help entrepreneurs find the right documentation, fill it out, and file it on time with the right government agency. In addition to helping you set up an LLC, Northwest has a host of additional services, like registered agent services, that new owner will find useful too.

Incfile

Incfile offers a great library of material to help first-time business owners figure out what kind of business they should set up. From there, Incfile will aid with documentation and filing procedures and demystify terms like registered agent, articles of organization, and EIN. The company has a strong reputation and great reviews online too.

3. File Articles of Organization

An LLC is formed in Wisconsin through the filing of Articles of Organization – Limited Liability Company with the Wisconsin Department of Financial Institutions.

You can file the articles online or by postal mail. The filing fee is $130 for online filings and $170 for mail filings.

The Articles of Organization must provide the following information:

LLC’s name, email address, and phone number
Registered agent name and mailing address
LLC organizers’ names and addresses
Whether the LLC is member-managed or manager-managed
The name of the individual that drafted the articles
The signature of an LLC organizer

Foreign LLC registration

An LLC formed in a state other than Wisconsin intending to do business in the state must register with the Wisconsin Department of Financial Institutions.

Complete these steps to do business in Wisconsin as a foreign LLC:

Comply with Wisconsin LLC naming rules and confirm that the LLC’s name is available using the Search Corporate Records Name Availability tool.
- If your original LLC name is taken, you must adopt a new name for use in Wisconsin and file a Name Registration Application-Foreign Corporation or Foreign Limited Liability Company by mail (no online filing). There is a $50 filing fee. Foreign LLCs must file a new name registration application (renewal application) every year between October 1 and December 31.
Appoint a Wisconsin registered agent.
File a Foreign Limited Liability Company Certificate of Registration Application with the Wisconsin Department of Financial Institutions online (no mail filing). The filing fee is $100.

4. Draft an operating agreement

Although not a legally mandated step for forming an LLC in Wisconsin, drafting a comprehensive LLC operating agreement is strongly recommended for all nascent limited liability companies.

The operating agreement should do the following:

Describe the LLC’s business structure
Establish the individual responsibilities and obligations of LLC members
Detail how the LLC will be run

Without an operating agreement clarifying the specific duties of its members, an LLC may face significant legal and operational difficulties.

5. Obtain an IRS Employer Identification Number (EIN)

All newly formed LLCs in the United States must acquire an Employer Identification Number (EIN) from the Internal Revenue Service (with the exception of single-member LLCs).

The nine-digit EIN is like a social security number for a business and is necessary to pay income tax, file tax returns, open business bank accounts, and perform many other important functions.

You can apply for an EIN online on the IRS website without paying a filing fee.

6. Fulfill your Wisconsin LLC’s additional legal obligations

Once an LLC is registered, its members must devote attention to fulfilling legal requirements that apply for the duration of the company’s existence.

File annual reports

All LLCs doing business in Wisconsin–including foreign LLCs–must file an annual report with the Wisconsin Department of Financial Institutions. The annual report is due in the quarter of the year that includes the anniversary month of the LLC’s legal organization in the state (for example, if an LLC was formed on February 16, it must file its annual report during Q1 each year).

The annual report must be filed online. The filing fee is $25 for an LLC formed in Wisconsin and $80 for a foreign LLC doing business in the state.

Obtain business licenses and permits

LLCs doing business in Wisconsin may be required to obtain state or locally issued business licenses, permits, or certifications depending on their type of business and location.

Check the Wisconsin Department of Safety and Professional Services website for information on state-issued licenses and permits, and to learn more about local requirements, contact a county or city clerk in your area.

Register with the Wisconsin Department of Revenue

Certain LLCs doing business in Wisconsin are required to register with the state’s Department of Revenue. This includes LLCs with employees and those that collect sales tax on goods and services.

Wisconsin LLC checklist

Naming requirements:

A Wisconsin LLC’s name must obey the following guidelines:

Must be distinguishable from the names of existing business entities on file with the Wisconsin Department of Financial Institutions.
Must contain one of the following phrases or abbreviations: “Limited Liability Company”, “Limited Company”, “LLC”, or “L.L.C.”

Formational documents and filing fees:

Name Reservation Application (optional but recommended) – $15 filing fee
Articles of Organization – Limited Liability Company – $130 online filing fee, $170 mail filing fee
Foreign Limited Liability Company Certificate of Registration Application (foreign LLCs only) – $100 filing fee

Registration procedure:

An LLC is created in Wisconsin through the filing of Articles of Organization – Limited Liability Company with the Wisconsin Department of Financial Institutions.

Additional legal obligations:

File annual reports – Required for all LLCs active in Wisconsin
Obtain business licenses and permits – Required for certain LLCs active in Wisconsin depending on their business type and location
Register with the Wisconsin Department of Revenue – Required for certain LLCs active in Wisconsin depending on their business type

The post How to Start an LLC in Wisconsin first appeared on Chamber of Commerce.

How to Start an LLC in Wyoming

Chamber of Commerce Team — Mon, 14 Sep 2020 19:48:30 +0000

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Northwest Registered Agent	Same day filing service Affordable pricing Strict ethical code	Visit Northwest
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When starting a new company, choosing a business entity is the most important decision that the founders must make. For most businesses with more than one founding member, forming as an LLC is often the best option for a number of reasons.

An LLC is an uncomplicated business structure that affords business owners legal protection by separating personal assets from business debts. Moreover, LLCs often enjoy a lower tax rate than corporations. Nevertheless, creating an LLC can get complicated depending on where you are based, with the formation process, filing fees, and continuing legal obligations differing from state to state.

The procedure for forming an LLC in Wyoming does not deviate much from the standard process used in most U.S. states. To avoid a misstep in the filing process, follow these steps to start an LLC in Wyoming, and refer to the checklist at the bottom of the post to familiarize yourself with the legal and financial requirements for LLCs in the state.

Starting an LLC in Wyoming step-by-step

1. Select a name for your Wyoming LLC

Follow naming requirements

There are 2 major guidelines to follow when naming your LLC in the State of Wyoming:

An LLC’s name must be distinguishable from the names of existing business entities on file with the Wyoming Secretary of State.
An LLC’s name must contain one of the following phrases or abbreviations: “Limited Liability Company”, “Limited Company”, “LLC”, or “L.L.C.”, “LC”, or “L.C.” The abbreviations “Co.” and “Ltd.” may be substituted for the words “Company” and “Limited”, respectively.

Check LLC name availability

Confirm that the LLC name you’ve selected is available in Wyoming using the Secretary of State Business Search.

Reserve your LLC name with the Secretary of State

Reserving your LLC name prevents another Wyoming business entity from using it before you can legally organize your business in the state.

File an Application for Reservation of Name with the Wyoming Secretary of State by mail (no online filing option) to reserve a name for up to 120 days. The filing fee is $60.

2. Designate a registered agent

As in every U.S. state, forming an LLC in Wyoming requires the appointment of a registered agent service to handle state and federal legal documents and service of process on the business’s behalf.

The registered agent must either be a state resident or business entity with a street address in Wyoming OR if the individual or business is based out-of-state, they must have a business office in Wyoming.

ZenBusiness	Start for $0 plus state fees Fast & simple services 100% accuracy guarantee	Visit ZenBusiness
Northwest Registered Agent	Same day filing service Affordable pricing Strict ethical code	Visit Northwest
Incfile.com	Your first year is free Wide range of services Technical support	Visit Incfile

Our picks of the best registered agent services

ZenBusiness

Northwest Registered Agent

Incfile

3. File Articles of Organization

An LLC is formed in Wyoming through the filing of Articles of Organization with the Wyoming Secretary of State.

You can file the articles online or by postal mail. The filing fee is $102 for online filings and $100 for mail filings.

The Articles of Organization must provide the following information:

LLC’s name and principal office address, and mailing address (if other than principal office address)
Registered agent name and mailing address
The signature and contact information of an LLC organizer

Foreign LLC registration

An LLC formed in a state other than Wyoming intending to do business in the state must register with the Wyoming Secretary of State.

Complete these steps to do business in Wyoming as a foreign LLC:

Comply with Wyoming LLC naming guidelines and confirm that the LLC’s name is available using the Secretary of State Business Search.
Appoint a Wyoming registered agent.
File an Application for Certificate of Authority with the Wyoming Secretary of State by mail (no online filing option). The filing fee is $150.
- The application must include two additional items: 1. a certificate of existence or a Certificate of Good Standing from the LLC’s state of origin from no more than 60 days before filing an application with the Wyoming Secretary of State 2. A written consent to appointment signed by the LLC’s registered agent (included in application)

4. Draft an operating agreement

Although not a legally mandated step for forming an LLC in Wyoming, drafting a comprehensive LLC operating agreement is strongly recommended for all nascent limited liability companies.

The operating agreement should do the following:

Describe the LLC’s business structure
Establish the individual responsibilities and obligations of LLC members
Detail how the LLC will be run

Without an operating agreement clarifying the specific duties of its members, an LLC may face significant legal and operational difficulties.

5. Obtain an IRS Employer Identification Number (EIN)

All newly formed LLCs in the United States must acquire an Employer Identification Number (EIN) from the Internal Revenue Service (with the exception of single-member LLCs).

The nine-digit EIN is like a social security number for a business and is necessary to pay income tax, file tax returns, open business bank accounts, and perform many other important functions.

You can apply for an EIN online on the IRS website without paying a filing fee.

6. Fulfill your Wyoming LLC’s additional legal obligations

Once an LLC is registered, its members must devote attention to fulfilling legal requirements that apply for the duration of the company’s existence.

File annual reports

All LLCs doing business in Wyoming, including foreign LLCs, are required to file an annual report with the Wyoming Secretary of State and pay an annual license tax (click here for tax amount information).

The annual report and tax payment are due on the first day of the anniversary month of the LLC’s formation or authorization to do business in the state (foreign LLCs).

The annual report can be filed online or by postal mail.

Obtain business licenses and permits

LLCs doing business in Wyoming may be required to obtain one or more state or locally issued business licenses, permits, or certifications depending on their type of business and location.

Visit the Licensing and Permitting page of the Wyoming Business Council website for information on state business licenses and permits. For information on local licensing requirements, contact a county or city clerk in the county or municipality where your LLC is based.

Register with the Wyoming Department of Revenue

LLCs doing business in Wyoming may be required to register with the Wyoming Department of Revenue depending on whether the LLC has employees or collects sales tax on retail goods and services.

You can learn more about DOR registration and find the necessary forms online at the Department of Revenue website.

Wyoming LLC checklist

Naming requirements:

A Wyoming LLC’s name must obey the following guidelines:

Must be distinguishable from the names of existing business entities on file with the Wyoming Secretary of State.
Must contain one of the following phrases or abbreviations: “Limited Liability Company”, “Limited Company”, “LLC”, or “L.L.C.”, “LC”, or “L.C.” The abbreviations “Co.” and “Ltd.” may be substituted for the words “Company” and “Limited”, respectively.

Formational documents and filing fees:

Application for Reservation of Name (optional) – $50 filing fee
Articles of Organization – $102 online filing fee, $100 mail filing fee
Application for Certificate of Authority (foreign LLCs only) – $150 filing fee

Registration procedure:

An LLC is created in Wyoming through the filing of Articles of Organization with the Wyoming Secretary of State.

Additional legal obligations:

File annual reports – Required for all LLCs doing business in Wyoming
Obtain business licenses and permits – Required for certain LLCs active in Wyoming depending on their business type and location
Register with the Wyoming Department of Revenue – Required for certain LLCs active in Wyoming depending on their business type

The post How to Start an LLC in Wyoming first appeared on Chamber of Commerce.

How to Start an LLC in North Dakota

Chamber of Commerce Team — Thu, 10 Sep 2020 19:06:08 +0000

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Northwest Registered Agent	Same day filing service Affordable pricing Strict ethical code	Visit Northwest
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Relative to in many other states, starting an LLC in North Dakota follows a clear-cut process that shouldn’t give entrepreneurs much difficulty. To avoid a misstep in the filing process, follow these steps to start an LLC in North Dakota, and refer to the checklist at the bottom of the post to familiarize yourself with the legal and financial requirements for LLCs in the state.

Starting an LLC in North Dakota step-by-step

1. Select a name for your North Dakota LLC

Follow naming requirements

There are 2 major guidelines to follow when naming your LLC in the State of North Dakota:

An LLC’s name must be distinguishable from the names of existing business entities on file with the North Dakota Secretary of State.
An LLC’s name must contain one of the following phrases or abbreviations: “Limited Liability Company”, “LLC”, or “L.L.C.”

Check name availability

To confirm that your chosen business name is available to use in North Dakota, perform a search with the Secretary of State Archived Business Records Search.

Reserve your LLC name with the Secretary of State

Many LLCs in the process of organizing opt to reserve their LLC name to prevent another business entity from using it before it is ready to file Articles of Organization.

File a Reserve Name Application with the North Dakota Secretary of State online, by fax, or by postal mail to reserve your chosen LLC name for up to a year. The reservation filing fee is $10.

2. Designate a registered agent

As in every U.S. state, forming an LLC in North Dakota requires the appointment of a registered agent service to handle state and federal legal documents and service of process on the business’s behalf.

The registered agent must either be a state resident or business entity with a street address in North Dakota OR if the individual or business is based out-of-state, they must have a business office in North Dakota.

ZenBusiness	Start for $0 plus state fees Fast & simple services 100% accuracy guarantee	Visit ZenBusiness
Northwest Registered Agent	Same day filing service Affordable pricing Strict ethical code	Visit Northwest
Incfile.com	Your first year is free Wide range of services Technical support	Visit Incfile

Our picks of the best registered agent services

ZenBusiness

Northwest Registered Agent

Incfile

3. File Articles of Organization

An LLC is formed in North Dakota through the filing of Articles of Organization with the North Dakota Secretary of State.

You can file online using the Secretary of State FirstStop application or by mail. The filing fee is $135.

The Articles of Organization must provide the following details:

LLC’s name, principal office address
LLC’s purpose (what business it does)
Whether the LLC is perpetual or will end at a set date
Registered agent name and address
Date the LLC becomes effective (if not immediate)
Names, addresses, and signatures of LLC organizers

Foreign LLC registration

An LLC formed outside of North Dakota that plans to do business in the state must register with the North Dakota Secretary of State.

Follow these steps to do business in North Dakota as a foreign LLC:

Comply with North Dakota LLC naming restrictions and make sure that your LLC’s name is available for use in the states with the Archived Business Records Search.
Appoint a North Dakota registered agent.
File a Certificate of Authority For Limited Liability Company Application with the North Dakota Secretary of State. The form is available through FirstStop. The application can be filed online, by fax, or by postal mail. The filing fee is $135.
- The certificate must be accompanied by either a Certificate of Good Standing or a Certificate of Existence from LLC’s state of origin that is 90 days old or less.

4. Draft an operating agreement

Although not a legally mandated step for forming an LLC in North Dakota, drafting a comprehensive LLC operating agreement is strongly recommended for all nascent limited liability companies.

The operating agreement should do the following:

Describe the LLC’s business structure
Establish the individual responsibilities and obligations of LLC members
Detail how the LLC will be run

Without an operating agreement clarifying the specific duties of its members, an LLC may face significant legal and operational difficulties.

5. Obtain an IRS Employer Identification Number (EIN)

All newly formed LLCs in the United States must acquire an Employer Identification Number (EIN) from the Internal Revenue Service (with the exception of single-member LLCs).

The nine-digit EIN is like a social security number for a business and is necessary to pay income tax, file tax returns, open business bank accounts, and perform many other important functions.

You can apply for an EIN online on the IRS website without paying a filing fee.

6. Fulfill your North Dakota LLC’s additional legal obligations

Once an LLC is registered, its members must devote attention to fulfilling legal requirements that apply for the duration of the company’s existence.

File annual reports

All LLCs active in North Dakota must file an annual report with the Secretary of State each year. This includes foreign LLCs doing business in the state. An LLC’s first annual report is due in the year following its legal formation.

An annual report is due every year by November 15 and can be filed online using FirstStop. The filing fee is $50.

Register with the North Dakota Office of the State Tax Commissioner

Certain LLCs active in North Dakota must register with the North Dakota Office of the State Tax Commissioner in order to satisfy state tax obligations. This includes LLCs that collect sales tax on retail goods and services and LLCs with employees.

You can register to pay state taxes online using the North Dakota Taxpayer Access Point (TAP).

Obtain business licenses and permits

LLCs active in North Dakota may be required to obtain one or more state or local business licenses, permits, or certifications depending on their type of business and the location of their principal office.

The ND.gov website provides a Business Licensing website that can aid in determining which state licenses are necessary (if any) and explains how to apply for them.

Local licensing regulations vary from area to area, so its best to contact a city or county clerk in the region where your LLC is located for instructions on how to comply with local laws.

North Dakota LLC checklist

Naming requirements:

A North Dakota LLC’s name must obey the following guidelines:

Must be distinguishable from the names of existing business entities on file with the North Dakota Secretary of State.
Must contain one of the following phrases or abbreviations: “Limited Liability Company”, “LLC”, or “L.L.C.”

Formational documents and filing fees:

Reserve Name Application – $10 filing fee (optional but recommended)
Articles of Organization – $135 filing fee
Certificate of Authority For Limited Liability Company Application – $135 filing fee (foreign LLCs, only)

Registration procedure:

An LLC is formed in North Dakota through the filing of Articles of Organization with the North Dakota Secretary of State.

Additional legal obligations:

File annual reports – Required for all LLCs doing business in North Dakota
Register with the North Dakota Office of the State Tax Commissioner – Required for certain North Dakota LLCs, including those with employees and those that collect sales tax
Obtain business licenses and permits – Required for certain North Dakota LLCs depending on business type and location

The post How to Start an LLC in North Dakota first appeared on Chamber of Commerce.

How to Start an LLC in Ohio

Chamber of Commerce Team — Thu, 10 Sep 2020 19:06:08 +0000

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The process of forming an LLC in Ohio is streamlined and lacking in unusual requirements. Entrepreneurs starting a business in the state shouldn’t face many difficulties. Another business-friendly aspect of forming an LLC in Ohio is the fact that the state doesn’t require limited liability companies to file annual reports.

To avoid a misstep in the filing process, follow these steps to start an LLC in Ohio, and refer to the checklist at the bottom of the post to familiarize yourself with the legal and financial requirements for LLCs in the state.

Starting an LLC in Ohio step-by-step

1. Select a name for your Ohio LLC

Follow naming requirements

There are 2 major guidelines to follow when naming your LLC in the State of Ohio:

An LLC’s name must be distinguishable from the names of existing business entities on file with the Ohio Secretary of State.
An LLC’s name must contain one of the following phrases or abbreviations: “Limited Liability Company”, “limited”, “ltd.”, “LLC”, or “L.L.C.”

Check the availability of your LLC name

To make sure that your chosen business name is free to use in Ohio, perform a search with the Ohio Secretary of State Business Search.

Reserve your LLC name with the Secretary of State

After selecting a name for your LLC, you can reserve it with the Ohio Secretary of State to prevent another business from registering with it before you legally organize in the state.

File a Name Reservation application with the Secretary of State online or through the mail to reserve a name for up to 180 days. The name reservation filing fee is $39.

2. Designate a registered agent

As in every U.S. state, forming an LLC in Ohio requires the appointment of a registered agent service to handle state and federal legal documents and service of process on the business’s behalf.

The registered agent must either be a state resident or business entity with a street address in Ohio OR if the individual or business is based out-of-state, they must have a business office in Ohio.

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3. File Articles of Organization

An LLC is formed in Ohio through the filing of Articles of Organization for a Limited Liability Company with the Ohio Secretary of State.

You can file the articles online or by mail. The filing fee is $99.

The Articles of Organization must provide the following information:

LLC’s name, principal office address, email address, and phone number
LLC’s purpose (type of business)
Articles of Organization effective date
Whether the LLC is perpetual or will end at a set date
Registered agent name, address, and signature
Name, address, and signature of an LLC member, manager, or legal representative

Foreign LLC registration

An LLC formed in another state that plans to do business in Ohio must register with the Ohio Secretary of State.

Follow these steps to do business in Ohio as a foreign LLC:

Follow Ohio LLC naming guidelines and confirm that your LLC’s name is available for use in the states with the Ohio Secretary of State Business Search.
Appoint an Ohio registered agent.
File a Registration of a Foreign Limited Liability Company with the Ohio Secretary of State. The application can be filed online or by mail. The filing fee is $99.
- The application must be accompanied by either a Certificate of Good Standing or a Certificate of Existence from the LLC’s home state that is dated fewer than 60 days prior to its filing with the Ohio Secretary of State.

4. Draft an operating agreement

Although not a legally mandated step for forming an LLC in Ohio, drafting a comprehensive LLC operating agreement is strongly recommended for all nascent limited liability companies.

The operating agreement should do the following:

Describe the LLC’s business structure
Establish the individual responsibilities and obligations of LLC members
Detail how the LLC will be run

Without an operating agreement clarifying the specific duties of its members, an LLC may face significant legal and operational difficulties.

5. Obtain an IRS Employer Identification Number (EIN)

All newly formed LLCs in the United States must acquire an Employer Identification Number (EIN) from the Internal Revenue Service (with the exception of single-member LLCs).

The nine-digit EIN is like a social security number for a business and is necessary to pay income tax, file tax returns, open business bank accounts, and perform many other important functions.

You can apply for an EIN online on the IRS website without paying a filing fee.

6. Fulfill your Ohio LLC’s additional legal obligations

Once an LLC is registered, its members must devote attention to fulfilling legal requirements that apply for the duration of the company’s existence.

Register with the Ohio Department of Taxation

Certain LLCs active in Ohio must register with the Ohio Department of Taxation in order to fulfill state tax obligations. This includes LLCs that collect sales tax on retail items and services and LLCs that have employees.

You can register to pay most state taxes online using the Ohio Business Gateway, although there may be cases where a form must be mailed into the DOT.

Obtain business licenses and permits

LLCs active in Ohio may be required to obtain one or more state or local business licenses, permits, or certifications depending on its type of business and location

Use the Ohio.gov Start a Business website to determine which state licenses are required for your LLC to operate and follow the links to apply for them. For local business licensing regulations, contact a city or county clerk in the area where your LLC is located.

Ohio LLC checklist

Naming requirements:

An Ohio LLC’s name must obey the following guidelines:

Must be distinguishable from the names of existing business entities on file with the Ohio Secretary of State.
Must contain one of the following phrases or abbreviations: “Limited Liability Company”, “limited”, “ltd.”, “LLC”, or “L.L.C.”

Formational documents and filing fees:

Name Reservation – $39 filing fee (optional, but recommended)
Articles of Organization for a Limited Liability Company – $99 filing fee
Registration of a Foreign Limited Liability Company – $99 filing fee (foreign LLCs, only)

Registration procedure:

An LLC is formed in Ohio through the filing of Articles of Organization for a Limited Liability Company with the Ohio Secretary of State.

Additional legal obligations:

Register with the Ohio Department of Taxation – Required for certain Ohio LLCs, including those with employees and those that collect sales tax on goods and services
Obtain business licenses and permits – Required for certain Ohio LLCs depending on business type and location

The post How to Start an LLC in Ohio first appeared on Chamber of Commerce.

How to Start an LLC in Pennsylvania

Chamber of Commerce Team — Thu, 10 Sep 2020 19:06:07 +0000

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Forming an LLC in the State of Pennsylvania follows a similar procedure to those found in other U.S. states, although the state does require an additional document known as a New Entity Docketing Statement to be filed during registration. Additionally, Pennsylvania imposes special requirements on foreign and domestic LLCs offering certain restricted professional services.

To avoid a misstep in the filing process, follow these steps to start an LLC in Pennsylvania, and refer to the checklist at the bottom of the post to familiarize yourself with the legal and financial requirements for LLCs in the state.

Starting an LLC in Pennsylvania step-by-step

1. Select a name for your Pennsylvania LLC

Follow naming requirements

There are 2 major guidelines to follow when naming your LLC in the State of Pennsylvania:

An LLC’s name must be distinguishable from the names of existing business entities on file with the Pennsylvania Department of State.
An LLC’s name must contain one of the following: “Limited Liability Company,” “Limited,” or “Limited Liability Company.” Standard abbreviations of these words are also acceptable.

Check the availability of your chosen LLC name

Confirm that your LLC name is available in Pennsylvania using the Pennsylvania Department of State Search Business Entity tool.

Reserve your LLC name with the Department of State

It’s a good idea to reserve your name with the Department of State to prevent another Pennsylvania business entity from using it before you file your Certificate of Organization.

The Pennsylvania Department of State allows you to file a Name Reservation application online or by mail in order to reserve a business name for up to 120 days. The filing fee is $70.

2. Designate a registered agent (registered office)

As in every U.S. state, forming an LLC in Pennsylvania requires the appointment of a registered agent service to handle state and federal legal documents and service of process on the business’s behalf. However, the state refers to a registered agent as a registered office.

The registered office must either be a state resident or business entity with a street address in Pennsylvania OR if the individual or business is based out-of-state, they must have a business office in Pennsylvania.

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3. File a Certificate of Organization and New Entity Docketing Statement

An LLC is created in Pennsylvania through the filing of a Certificate of Organization Domestic Limited Liability Company and a New Entity Docketing Statement with the Pennsylvania Department of State.

You can file the certificate online using PENN file or print and complete a form and file by mail. The filing fee is $125.

The Certificate of Organization must provide the following information:

LLC’s name
Registered agent name and address
The effective date of the Certificate of Organization
Whether the LLC provides professional services
Whether the LLC is a public benefit company
LLC organizers’ names and signatures

Unlike most other states, the Pennsylvania Department of State requires an LLC to submit a New Entity Docketing Statement in addition to its Certificate of Organization. The statement must include the following details:

LLC’s name
Name and address of the individual that will file the LLC’s initial tax reports
LLC business description
Federal employer identification number
The date ending the LLC’s fiscal year

Foreign LLC registration

An LLC formed out-of-state that intends to do business in Pennsylvania must register with the Pennsylvania Department of State.

Follow these steps to do business in Pennsylvania as a foreign LLC:

Comply with Pennsylvania LLC naming guidelines and confirm that your LLC name is available in the state using the Pennsylvania Department of State Search Business Entity tool.
- If the name is already in use, you must file a Registration of Fictitious Name to use a different name in the state and pay the $70 filing fee.
Appoint a Pennsylvania registered office (registered agent).
File a Foreign Registration Statement and New Entity Docketing Statement (see section above) with the Pennsylvania Department of State. The statement can be filed online or through the mail. The filing fee is $250.

4. Draft an operating agreement

Although not a legally mandated step for forming an LLC in Pennsylvania, drafting a comprehensive LLC operating agreement is strongly recommended for all nascent limited liability companies.

The operating agreement should do the following:

Describe the LLC’s business structure
Establish the individual responsibilities and obligations of LLC members
Detail how the LLC will be run

Without an operating agreement clarifying the specific duties of its members, an LLC may face significant legal and operational difficulties.

5. Obtain an IRS Employer Identification Number (EIN)

All newly formed LLCs in the United States must acquire an Employer Identification Number (EIN) from the Internal Revenue Service (with the exception of single-member LLCs).

The nine-digit EIN is like a social security number for a business and is necessary to pay income tax, file tax returns, open business bank accounts, and perform many other important functions.

You can apply for an EIN online on the IRS website without paying a filing fee.

6. Fulfill your Pennsylvania LLC’s additional legal obligations

Once an LLC is registered, its members must devote attention to fulfilling legal requirements that apply for the duration of the company’s existence.

File Annual Registration (Restricted foreign and professional LLCs only)

Foreign and domestic LLCs active in Pennsylvania that offer certain restricted professional services are required to file a Certificate of Annual Registration with the Department of State Corporation Bureau every year by April 15. LLCs that do not fit this description are not required to file an annual registration.

The certificate may be filed online or by mail. The annual registration filing fee amounts to at least $500 per year, with the potential for additional fees for every member of the LLC.

Register with the Pennsylvania Department of Revenue

Certain LLCs active in Pennsylvania must register with the Pennsylvania Department of Revenue in order to fulfill a number of state tax obligations. This includes LLCs that collect sales tax and those that have employees.

Registering for most state taxes can be done using the DOR myPATH system. The website also includes a list of major state business taxes.

Obtain business licenses and permits

LLCs active in Pennsylvania may be required to obtain one or more state or local business licenses or permits depending on their type of business and location.

The Pennsylvania Business One-Stop Shop can help in determining which state and local licenses an LLC may need to obtain.

For additional information on local licensing regulations, contact a city or county clerk in the city or county where your LLC is located.

Pennsylvania LLC checklist

Naming requirements:

A Pennsylvania LLC’s name must obey the following guidelines:

Must be distinguishable from the names of existing business entities on file with the Pennsylvania Department of State.
Must contain one of the following: “Limited Liability Company,” “Limited,” or “Limited Liability Company.” Standard abbreviations of these words are also acceptable.

Formational documents and filing fees:

Name Reservation – $70 filing fee (optional yet recommended)
Certificate of Organization Domestic Limited Liability Company – $125 filing fee
Foreign Registration Statement – $250 filing fee (Foreign LLCs only)
New Entity Docketing Statement – Required of both foreign and domestic LLCs upon initial registration

Registration procedure:

An LLC is created in Pennsylvania through the filing of a Certificate of Organization Domestic Limited Liability Company and a New Entity Docketing Statement with the Pennsylvania Department of State.

Additional legal obligations:

File a Certificate of Annual Registration – Required for professional LLCs and foreign LLCs engaged in specific restricted professional services
Register with the Pennsylvania Department of Revenue – Required for some certain LLCs, including those with employees and those that collect sales tax
Obtain business licenses and permits – Required for certain LLCs depending on their business type and location

The post How to Start an LLC in Pennsylvania first appeared on Chamber of Commerce.

How to Start an LLC in Rhode Island

Chamber of Commerce Team — Thu, 10 Sep 2020 19:06:07 +0000

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The process of forming an LLC in Rhode Island more or less follows the same steps as in most other states and shouldn’t pose any significant difficulty. To avoid a misstep in the filing process, follow these steps to start an LLC in Rhode Island, and refer to the checklist at the bottom of the post to familiarize yourself with the legal and financial requirements for LLCs in the state.

Starting an LLC in Rhode Island step-by-step

1. Select a name for your Rhode Island LLC

Follow naming requirements

There are 2 major guidelines to follow when naming your LLC in the State of Rhode Island:

An LLC’s name must be distinguishable from the names of existing business entities on file with the Rhode Island Department of State.
An LLC’s name must contain one of the following phrases or abbreviations: “Limited Liability Company”, “LLC”, or “L.L.C.” Abbreviations may be either upper-case or lower-case.

Check LLC name availability

You can confirm that your chosen LLC name isn’t being used by another business in Rhode Island using the Rhode Island Department of State Business Entity Search.

Reserve your LLC name with the Department of State

After selecting a name for your LLC that is available, you can reserve it with the Rhode Island Department of State to prevent another business entity from using it before you can file your Articles of Organization.

File a Reservation of Entity Name with the Department of State’s Corporations Division online or by postal mail to reserve a name for up to 120 days. The filing fee is $50.

2. Designate a resident agent (aka registered agent)

As in every U.S. state, forming an LLC in Rhode Island requires the appointment of a registered agent service to handle state and federal legal documents and service of process on the business’s behalf. However, the state uses the term “resident agent.”

The resident agent must either be a state resident or business entity with a street address in Rhode Island OR if the individual or business is based out-of-state, they must have a business office in Rhode Island.

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3. File Articles of Organization

An LLC is formed in Rhode Island through the filing of Articles of Organization with the Rhode Island Department of State.

You can file the articles online, in-person, or by postal mail. The filing fee is $150 and can be paid by check, cash, or credit card.

The Articles of Organization must provide the following information:

LLC’s name and principal office address
Resident agent name and address
Whether the LLC is member-managed or manager-managed (along with managers’ names and addresses if manager-managed)
The effective date of the Articles (if a later date than filing)
LLC’s preferred treatment for tax purposes
An authorized person’s signature

Foreign LLC registration

An LLC formed outside of Rhode Island that intends to do business in the state must register with the Rhode Island Department of State.

Follow these steps to do business in Rhode Island as a foreign LLC:

Comply with Rhode Island LLC naming rules and confirm that the LLC name is available in the state using the Department of State Business Entity Search.
Appoint a Rhode Island resident agent (AKA registered agent).
File an Application for Registration for a Limited Liability Company (Form 450) with the Rhode Island Department of State by postal mail. The filing fee is $150.
- The application must include either a Certificate of Good Standing or Letter of Status from the LLC’s home state that is no more than 60 days old.

4. Draft an operating agreement

Although not a legally mandated step for forming an LLC in Rhode Island, drafting a comprehensive LLC operating agreement is strongly recommended for all nascent limited liability companies.

The operating agreement should do the following:

Describe the LLC’s business structure
Establish the individual responsibilities and obligations of LLC members
Detail how the LLC will be run

Without an operating agreement clarifying the specific duties of its members, an LLC may face significant legal and operational difficulties.

5. Obtain an IRS Employer Identification Number (EIN)

All newly formed LLCs in the United States must acquire an Employer Identification Number (EIN) from the Internal Revenue Service (with the exception of single-member LLCs).

The nine-digit EIN is like a social security number for a business and is necessary to pay income tax, file tax returns, open business bank accounts, and perform many other important functions.

You can apply for an EIN online on the IRS website without paying a filing fee.

6. Fulfill your Rhode Island LLC’s additional legal obligations

Once an LLC is registered, its members must devote attention to fulfilling legal requirements that apply for the duration of the company’s existence.

File annual reports

All LLCs active in Rhode Island must file a Limited Liability Company Annual Report with the Department of State each year between September 1 and November 1. This includes foreign LLCs doing business in the state. The initial report is due the year following the year in which an LLC filed its Articles of Organization.

The annual report can be filed online or through the mail. The filing fee is $50.

Register with the Rhode Island Division of Taxation

All LLCs active in Rhode Island are required to register with the Rhode Island Division of Taxation. Additionally, all LLCs must pay a minimum annual tax of $400 without exception.

You can begin the state tax registration process by filing Form BAR online, although additional paperwork may need to be submitted through the mail.

Obtain business licenses and permits

LLCs doing business in Rhode Island may be required to obtain one or more state or local business licenses or permits depending on their type of business and location.

RI.gov provides a Licensing, Regulations, Permits, and Forms section (select from the dropdown menu) that can aid in determining which business licenses and permits are necessary for your LLC to operate in the state. For information on local licensing requirements, contact a city or county clerk in the city or county where your LLC is located.

Rhode Island LLC checklist

Naming requirements:

A Rhode Island LLC’s name must obey the following guidelines:

Must be distinguishable from the names of existing business entities on file with the Rhode Island Department of State.
Must contain one of the following phrases or abbreviations: “Limited Liability Company”, “LLC”, or “L.L.C.” Abbreviations may be either upper-case or lower-case.

Formational documents and filing fees:

Reservation of Entity Name – $50 filing fee (optional but recommended)
Articles of Organization – $150 filing fee
Application for Registration for a Limited Liability Company – $150 filing fee (foreign LLCs only)

Registration procedure:

An LLC is formed in Rhode Island through the filing of Articles of Organization with the Rhode Island Department of State.

Additional legal obligations:

File annual reports – Required for all LLCs doing business in Rhode Island
Register with the Rhode Island Division of Taxation – Required for all LLCs doing business in Rhode Island
Pay a minimum annual tax of $400 – Required for all LLCs doing business in Rhode Island
Obtain business licenses and permits – Required for certain Rhode Island LLCs depending on business type and area

The post How to Start an LLC in Rhode Island first appeared on Chamber of Commerce.