A Limited liability company (LLC ) is a business entity that offers limited liability protection and pass-through taxation. As with corporations, the LLC legally exists as a separate entity from its owners. Therefore, owners cannot typically be held personally responsible for the business debts and liabilities.
The LLC allows for pass-through taxation, as its income is not taxed at the entity level; however, a tax return for the LLC must be completed if the LLC has more than one owner. Any LLC income or loss as shown on this return is passed through to the owner(s). The owners, also called members, must then report the income or loss on their personal tax returns and pay any necessary tax.
Choosing the name of a new company is an important decision. It is typically advisable to select a name that projects the image you want for your new company. Selecting a name that is easy for customers to remember and spell also has benefits. Legally, the name you select for your LLC must not be "deceptively similar" to any existing company in that state or must be "distinguishable on the record" of your state.
It is possible that the name you select will not be available in your state of incorporation—that’s why BizFilings asks for a second choice on our LLC order form. Additionally, most states require that the name you select shows your business is an LLC by including the words "Limited Liability Company" or the abbreviation of "LLC."
Typically LLCs are taxed like partnerships, with pass-through taxation. While multi-member LLCs must file an informational tax return, single member LLCs do not. In both cases, the profits or losses are “passed-through” the business and reported on the owners’ tax returns. Any tax due is then paid by the owners at the individual tax level.
LLCs can also elect to be taxed like corporations, where the profits of the LLC are taxed at the business level. The state income tax treatment of LLC profits and losses may or may not mirror the IRS tax treatment depending on the state. For more information on your state tax obligations, visit Business Owner's Toolkit.
LLCs are also subject to any franchise taxes imposed by the state of incorporation. A franchise tax is a tax imposed for the mere privilege of being an LLC incorporated or registered to transact business (through a process called foreign qualification) in that state. Franchise taxes are typically due annually, and the amounts differ by state. Note: California LLCs are subject to an annual minimum franchise tax of $800 per year. The first payment must be made within 3 months of forming your LLC. The state will send a bill to remind you to make this payment.
An LLC may be managed by its members (owners) or by selected managers. If the LLC is to be managed by its members, it operates much like a partnership. Each member has an equal say in the company decision-making process. If the members choose, they may elect a manager or managers to act in a capacity similar to a corporation's board of directors. These managers are in charge of the affairs of the LLC.
Member-management is the normal default rule of state law. This means that if managers are not selected in the Articles of Organization LLC forms, the members will direct the affairs of the LLC.
While the S corporation and LLC both have pass-through taxation, the S corporation lacks the flexibility of an LLC in allocating income to the owners. Additionally, an LLC may offer several classes of membership interest while an S corporation may only have one class of stock.
In terms of number of owners, any number of individuals or entities may own interests in an LLC. However, ownership interest in an S corporation is limited to no more than 100 shareholders. Also, S corporations cannot be owned by C corporations, other S corporations, many trusts, LLCs, partnerships or nonresident aliens. Finally, LLCs are allowed to have subsidiaries without restriction.
There are also differences in the handling of employment/self-employment taxes. Visit our article on LLCs versus S corporations for more information.
A few states require notice to be published in a newspaper that an LLC has been formed. States with this requirement for LLCs include: Arizona, Nebraska and New York. The Published Notice of Formation Service can be added to a BizFilings LLC Formation Service order in each of these states. For New York limited liability entities (LLC, LP, LLP), the New York Published Notice of Formation Service can also be purchased independently from BizFilings.
In New York, limited liability entities are required to publish notice of their formation or registration in two New York newspapers and to file proof of publication with the Department of State within 120 days. The publication is made at the county level in two newspapers. Failure to comply with the publication requirement by the deadline results in the suspension of a company's authority to do business in the State of New York.
A registered agent is required when you start an LLC or register to transact business in another state (a process called foreign qualification). BizFilings includes Registered Agent Service with its incorporation service packages
With its Registered Agent Service BizFilings satisfies the state's legal requirement to have an individual or company receive important legal and tax documents on behalf of your company. Our service doesn't stop there, however. BizFilings provides a number of advantages at no additional charge to you, such as: our monthly Registered Agent Watch email, access to BizComply─our online compliance management tool, electronic Service of Process delivery, online access to your account and more.
BizFilings' Registered Agent Service provides a number of benefits including:
After you decide to form an LLC, Articles of Organization LLC forms must be filed, and state and initial fees must be paid. BizFilings' LLC Formation Service packages handle these steps for you.
After your LLC forms are filed, it is recommended that your LLC hold an organizational meeting of the members/managers. This meeting will help to start an LLC by adopting an operating agreement, issue membership interest certificates to members, and undertake other preliminary matters such as authorizing the opening of a bank account for the LLC. View our article on Business Compliance Requirements to learn more.
No. BizFilings’ Rush Filing Service for LLCs is available in the states listed in the chart below. The turnaround time listed adjacent to each state is the time it will take us to receive verification that your LLC forms have been filed with the state, following the name approval or consent. The time frame excludes weekends and holidays. Total time for receiving your state-approved incorporation documents from the state and returning them to you may take around a week after verification.
|State||Turnaround Time||State||Turnaround Time|
|Alaska||24 hours||Michigan||48 hours|
|Arkansas||24 hours||Montana||24 hours|
|California||48 hours||Nevada||48 hours|
|Colorado||24 hours||New Jersey||24 hours|
|Connecticut||48 hours||New Mexico||48 hours|
|Delaware||24 hours||New York||24 hours|
|Florida||24 hours||North Carolina||48 hours|
|Maryland||48 hours||Virginia||48 hours|
The 24- or 48-hour filing time is for the LLC formation only. It typically takes longer for the states to produce the filed incorporation documents. Once BizFilings receives your documents from the state, we will ship them to you via FedEx Overnight delivery. This means you should have your documents in hand anywhere from just a few days to one week after filing. We will also scan them into our Online Status Center, making them available to you before you receive your original documents to help get an LLC started as quickly as possible.
Note: some states require your signature on the incorporation documents when someone other than BizFilings is acting as registered agent. In these cases, the filing timeframe of 24 to 48 hours begins after we have received the signed documents and received any applicable prior approvals or consent.