LLC FAQs | Frequently Asked Questions About Limited Liability Companies | Swyft Filings
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Frequently Asked Questions

Limited Liability Company FAQs

  • What formal paperwork must be filed when forming an LLC?

    The application required for incorporating as a Limited Liability Company (LLC) is called the Articles of Incorporation (also referred to as a Certificate of Incorporation). This document contains basic information about the company, its owners, and its directors. Depending on your state of incorporation, there may also be state-level fees or taxes that must be paid.

    Swyft Filings can take care of the required filings for your LLC. which allows you to focus on developing and growing your new company.

  • Are there any restrictions on who can form an LLC?

    There are typically no restrictions on who can form an LLC. However, a few states do require that an individual be at least 18 years of age to officially become an LLC owner.

  • Is an attorney required when forming an LLC?

    An attorney is typically not required when starting a business. A business filing service such as Swyft Filings can help you streamline the formation process, and save you a great deal of time, effort, and money. However, if you are unsure of which business structure may be right for you, or you have questions regarding specific tax or organizational issues, it may be advisable to speak with an attorney or accountant before starting a new business.

  • How should I name my LLC?

    Your company name must be unique and not deceptively similar to any other trademarked name or business. It is also required that your name not intentionally misrepresent the products or services you offer. For LLCs, most states require a signifier of your corporate status, such as “LLC” or “L.L.C.” to the end of your company’s name. Choosing a name for your LLC is an important decision so take time to research and select a name that will accurately represent you and your business.

    If you would like Swyft Filings to check if your business name is available for use, we offer a free Name Availability Search. Just give us a call and we will begin this process for you.

  • How are LLCs taxed?

    LLCs are typically taxed on a pass through basis, much like general partnerships. As pass through entities, the profits and losses of LLCs are passed on to the individual owners and are reflected on the owner’s personal income tax returns. Alternatively, LLCS may elect to be taxed as S corporations to potentially reduce the self-employment taxes imposed on the owners.

    It should also be noted that several states impose a franchise tax, ranging from $100 to $800, on LLCs. These taxes are typically due on an annual basis and must be paid in order to keep you business in compliance with the state. Failure to pay the imposed franchise tax can lead to the forfeiture of your right to conduct business in your state.

  • How is management handled for LLCs?

    LLCs can be organized with two different structures. The first structure will allow the business to operate much like a general partnership or sole proprietorship. In this structure theMembers(owners) will be in charge of making all business decisions. This is the most commonly used structured among LLC owners.

    If the LLC will beManagergoverned, an elected set of Managers (who can be people other than Members), will make the business decisions. Under this structure, the business will more closely resemble a traditional corporation, with the Managers acting as directors, and the owners acting as shareholders. If an LLC elects to be governed by Managers, this decision must be stated in the Articles of Organization.

  • Should I form an LLC or an S corporation?

    The LLC is typically the best choice for smaller entities. The LLC structure provides a great deal of ownership flexibility in that an LLC may have any number ofMembers(owners) including non-US citizens and subsidiary companies. LLCs are also able to distribute several different classes of stock or ownership interest. However, their owners are typically required to pay a self-employment tax.

    S Corp regulations are much less lenient in regards to ownership. They are limited to 100 owners and all owners must be US citizens. S Corps are also unable to provide potential shareholders with different classes of ownership interest or stock. However, S Corp owners are typically free from self-employment taxes.

  • Do LLCs face any publication requirements?

    There are certain states that will require you to publish a notice of business formation in the local newspaper(s) such as Arizona, New York, Nebraska, and Pennsylvania. The requirement can be met by using a filing service such as Swyft Filings.

    It should also be noted that the state of New York requires limited liability companies to comply with an unusually strict set of publication requirements. In addition to publishing notices in two papers in the county in which your business is forming, you will also be required to provide proof of this to New York’s Department of State within 120 days of becoming officially recognized as a business. Failing to do so can result in suspension of your right to conduct business in the state.

  • Do all LLCs need a Registered Agent?

    All formal business entities, including LLCs, are required to have a Registered Agent on file with the state at all times. The agent may be an individual or company with a physical address located in the state of incorporation. Agents must be available at all times during standard business hours (9 a.m. - 5 p.m. Monday – Friday). The role of a Registered Agent is to receive any and all of communications from the government to the business. The agent’s name and address must be disclosed as part of the company’s public record.

    If you are foreign qualifying your business or wish to keep your contact information private, it may be wise to hire a professional Registered Agent service such as Swyft Filings. Our professional Registered Agent service ensures that your legal requirements will be fulfilled and that all communications will be relayed to your company in a timely manner.

  • Where can I find a reliable Registered Agent?

    Swyft Filings offers a professional Registered Agent service as well business filing services. Regardless of the state in which your business is located, we can provide you with Registered Agent services. Swyft Filings provides companies of all types and sizes an affordable solution that will ensure that they remain compliant with all Registered Agent requirements.

  • What are the general steps for incorporating as an LLC?

    The first step in forming an LLC is to file your company’s Articles of Incorporation with the state in which you are looking to establish your business. Once this has been completed, it is recommended that you take the time to develop a formal set of documents that will explicitly outline the ownership and management structure of the business, as well as establish your initial bank accounts.

    There may be some state specific requirements that you must observe during these processes as well. Also, keep in mind that LLCs do face ongoing compliance requirements that will need to be fulfilled on an annual basis.

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