Frequently Asked Questions About LLCs

July 10, 2020

A limited liability company, or LLC, is a type of legal business entity. If you are considering LLC creation, learn more about them here to determine if the business option is right for you. And remember, your local Los Angeles accounting service is here to help you with your LLC needs. 

Am I a Candidate For an LLC?

If you are operating a business as its sole proprietor or about to start a business of any kind, you should consider turning it into an LLC. It is applicable to almost every type of business and does not discriminate by company size. Even if you are the only member of your business or have less than 10 employees, you can create an LLC. You can also turn your commercial or rental property company into a limited liability company. 

Will I Receive a Tax Number?

Since Employee IDs, or tax IDs, are necessary to business operations, you will need one to form your company. They are especially essential if you own your business with one or more partners, oversee employees, want to apply for a business loan, open a business bank account, and or file tax returns including Excise, Alcohol, Employment, Firearms, or Tobacco. 

What Does it Cost to Create an LLC?

The cost depends in part on the state you form your company in, and typically range from about $50 to a few hundred per year. Costs can also include setup, annual license, and franchise fees among others concerning your business’s financial management. If you have an attorney assist you in LLC creation, you will pay their fee as well. 

What Benefits Does an LLC Provide? 

LLCs offer a slew of benefits, including personal asset protection. If an individual or creditor files a lawsuit against your company, for example, they cannot use personal assets such as your non-company vehicles, house, and non-business bank accounts for collection purposes. 

Other benefits include business flexibility, as there are no regulations or guidelines regarding the number of owners, nor do you need to set up a board of directors or have shareholder meetings. LLCs also provide pass-through taxation, meaning your business’s profits and losses “pass through” your business to land on your personal tax returns. 

Discuss your LLC needs today with the Encino tax consultants at Wallace & Associates