Forming an LLC is relatively simple if you know what steps to take. By learning more about a limited liability company, you can decide if this is the legal route you wish to take your business. Below are three things you need to know to get started including applying for an IRS EIN tax ID. Read on to get started transforming your business into an LLC.
Understanding What an LLC is
The first thing you need to know is what an LLC is. There are several business structures you can use for your company, including the LLC filing. An LLC provides you with more flexibility, such as how you are taxed, who has management rights, and how profits will be distributed to owners, or members as they known in an LLC. A small business can certainly benefit from being an LLC as there is a limited personal liability on the owners.
How to Become an LLC
Once you have made the decision to transform your company into an LLC, you need to know what to do. You will need to choose a name for your LLC, one that is not already being used. You will then need to consider how the business will be managed, be it a member-managed company or manager-managed.
Articles of Organization will then need to be filed with the secretary of state within the state you wish to operate. You can use an online filing service to complete this option to make the process easier. You will also need to create an operating agreement as to how your business will function.
Tax ID Filing
An LLC also needs to have a tax ID or EIN number. You can apply for a tax ID online, making the process of obtaining your identification number a breeze. The nine-digit number will be used by the IRS for identification purposes when filing taxes.
