Many small business owners like to form corporations to keep their assets separate from those of the business. If something happens to the business and the creditors start calling at least your personal assets won’t be on the table. For many, starting a limited liability company, or LLC, is a good option and many times the limited liability company forms you need can be found right online for free.
Since it’s very inexpensive to form your own LLC, and you get a lot of personal protection from doing so, why wouldn’t you, Just remember that I can’t give out legal advice since I’m not a lawyer and if you have questions you’ll have to contact a lawyer to get them answered.
First things first, what state do you want to set up your LLC in, You do have a choice, you don’t have to set up your LLC in the state you live in or even the state you do business in. This may sound strange but there can be great advantages to setting up your company in a state that has a long standing reputation of being pro business.
One such state is Delaware. This state has spent the last hundred years or so setting up it’s legal system to benefit, and not punish, corporations. The fees to incorporate your business are very low especially when compared to other states. There are many other business benefits to incorporating in Delaware, check them out before you decide where to set up your LLC.
Once you’ve decided on the state for your company, you can go to the secretary of state website for that state and download the forms necessary to file for your LLC. It’s a simple process and you can easily fill the forms out, sign and date them then send them back. Most websites will have a section for frequently asked questions and possibly even a number you can call if you have questions.
Basic information on the purpose of the company, the length of time you plan on being in business, the names and addresses of the people involved, etc. will all be requested when you fill out the forms.
You will also need to provide a name for your LLC and again, you can do this right on the secretary of state website. There is usually a data base containing all the corporations so you can see if the name you’ve chosen is available.
When you send in the form you will need to include the filing fees. You can also get an Employer Identification Number or EIN, by filling out an SS-4 application. You don’t need to pay someone to do this for you, you can do it yourself for free. The form you need is on the IRS website. Just download it, fill it out and fax it or mail it back to the IRS.
If you feel more comfortable having an attorney help you with your limited liability company forms and setting up your corporation, than by all means hire someone. But just remember that the forms you need are readily available online and you may be able to save yourself a lot of money if you just go online and get them yourself.