USA LLC Registration
An LLC is a business structure much like a hybrid between a partnership and a corporation. Like a partnership, an LLC has the flexibility regarding management, taxes, and certain operations. Like a corporation, an LLC is formed at the state level, has its own separate legal identity, and has liability which is limited to the assets owned or controlled by the LLC. This means that the debts and assets of the business belong to the LLC, not you. So if the business is sued, damages are usually limited to the LLC’s assets (not your house or car).
When it comes to taxes, LLCs are typically taxed like partnerships or sole proprietorships (but can elect to be taxed like a C or S corporation). LLCs can also self-manage, much like a partnership (but can choose to appoint managers to operate more like a corporation).
The major differences between an LLC and a corporation boil down to ownership, management, and taxes. LLCs are owned by members. Members can manage directly or appoint managers, giving LLCs the flexibility of operating like partnerships or corporations. Corporations (except for non-stock corporations like nonprofits) are owned by shareholders. Shareholders elect a board of directors to make business decisions. The board of directors appoints officers to execute those decisions.
When it comes to taxes, LLCs are taxed as partnerships unless they choose to be taxed as S-corps or C-corps. Corporations are taxed as C-corps unless they choose to be taxed as S-corps. Corporations can’t be taxed as partnerships, meaning LLCs have greater tax flexibility.
Typically around $100. Each state sets its own fees to file LLC articles of organization. This tends to be flat filing fee, ranging from $40 (Kentucky) to $500 (Massachusetts). Tennessee, however, bases their LLC formation fee on how many members your business has, so their fee can be anywhere from $300 to $3,000.
At Northwest, we can form your LLC for just $225 plus state fees, a total that includes one year of registered agent service.
No, but a sole proprietor can become an LLC. A sole properietorship and an LLC are two different kinds of business structures. If you’re a solo business owner that has never registered with the state to form a business entity, you have a sole proprietorship.
A sole proprietor can easily become an LLC by filing articles of organization with the state. An LLC typically has increased reporting requirements but receives benefits that are out-of-reach to sole proprietors, such as limited liability and tax flexibility.
Yes, forming an LLC can help you reduce your public footprint. Living publicly—and giving away your data to be sold and resold—has been normalized. It’s possible to take back control of your own information in a number of ways, and in some cases, forming an LLC can help. Note that this will require taking certain steps, like hiring a registered agent service, to keep your personal information off public filings.
There are several different types of LLCs that can vary depending on how you set up your business, and the state and industry in which you operate. Some common types of LLCs include:
Single Member LLC (with only one owner)
Professional LLCs (for state-licensed professions, like doctors and lawyers)
Series LLC (for LLCs needing separate liability protection for different parts of their business)
There are also LLCs taxed as S-corps and C-corps. LLC management is another way to categorize LLCs. There are member-managed LLCs and manager-managed LLCs. It’s even possible to form a nonprofit LLC in a handful of states.
Yes and no. For an LLC with default tax classification, the company itself doesn’t pay federal taxes. Instead, profits are distributed to owners (members) who then report those earnings on their personal filings. This is known as pass-through taxation.
However, LLCs might be required to pay various state taxes, such as franchise taxes. LLCs can also elect to be taxed as corporations—in which case, the LLC itself may owe taxes.
Yes, you can file articles to form your LLC yourself. However, there are a few downsides to doing so.
First, any information you list in your articles becomes a part of the public record—permanently. There’s no going back and erasing your home address or other personal info once it’s out there. When you file yourself, you are the “organizer” of your LLC and usually need to list your name and address. In most states, you can avoid putting your personal address (and in a few states, even your name) on this public doc by hiring a service like Northwest to be your registered agent and organizer.
Second, when filing on your own, it’s easy to make expensive mistakes that can cause your filing to be rejected or that can require pricey amendments down the road. At Northwest, we form LLCs across the nation every day. We know the ins and outs of every state from Alabama to Wyoming.
Maybe you prefer to keep your personal address off your public filings.
Maybe you need a registered agent, operating agreement, business address and mail forwarding—all of which is included with our LLC formation.
Maybe you have a lot of business questions our Corporate Guides® can answer for you.
Maybe you’re tired of companies selling your data.
Or maybe you just don’t want to have to file more paperwork.
Whatever your reasons are, TexasFinserv is here to help you start your LLC the right way.