You have completed your due diligence; you know the market and your product or service and are ready to take the plunge and start your business. You think you will use an LLC but are not quite sure what that means. This piece will help provide basic information to give you a better understanding of what it means to start an LLC and get you on your way.
What is an LLC?
A limited liability company (LLC) is distinct from a partnership and corporation but has the power of both. The business owner has the ability to structure an LLC to operate much like a business partnership but with the addition of liability protection or can structure it to operate much like an “S” corporation but without the tax implications that come with this formation.
Where do I start?
An LLC is created when a business owner files a certificate of formation with the Texas Secretary of State. It is important to make sure to choose a name that meets your business goals, is unique, and, if you choose the LLC structure, also has “LLC” in the name. It can help to put together an operating agreement early on in the process. This document outlines the business operations and can help you to get a better feel for how you want your business to run.
You will also need an Employer Identification Number (EIN) from the Internal Revenue Service (IRS). This number is needed to get bank accounts for the business and file taxes.
Is there anything else I should know before I start my business?
An LLC is just one of many business structures that owners should take into consideration before starting the formation process. Each has its benefits and drawbacks, and the right fit will vary depending on your goals. An attorney experienced in business formation in Texas can review your options and help to better ensure you choose the business structure that meets your needs.