Are you starting your own business but having second thoughts due to limited resources? Be worry and hassle free – starting your own business is now made easy and inexpensive.
Many have often asked themselves how much LLC cost and assumed it’s expensive. The truth is forming an LLC is quite affordable. Over the years many have found the wonders of making their business a Limited Liability Company (LLC) due to its cost benefits.
Forming an LLC allows you to run your small business and enjoy similar but limited rules and regulations like that of large corporations.
Why set up an LLC?
First, filing your business as an LLC is now made easy. It is especially designed for small to medium sized or start-up businesses like yours.
If you have the budget but do not have the time, you may opt to hire agencies who offer services for a fee that will include preparation of all required documents down to filing them directly with the Secretary of State.
But if you are starting and a little conservative on administrative expenses you may do the filing yourself.
You need the following requirements in order to file your business as LLC in Indiana:
- Distinctive and unique name for your LLC that is not used yet by any other companies
- A registered agent that has a physical address in Indiana and must be available to receive legal documents for your company during business hours.
- An Articles of Organization filed at the IN Secretary of State via online, mail or via an agency
- An Operating Agreement to ensure that all business owners are aligned with its ownership and operating procedures. This legal document will help reduce risk of future conflict.
- Get an Employer Identification Number (EIN) to hire employee, open a business bank account and will be used as reference to file and manage Federal and State Taxes
Advantage of being an LLC
There many advantages to forming an LLC:
- The main advantage of forming an LLC is the time and cost benefits. Having a business would require a lot of time, liabilities and policies to think of. While it allows you to operate as a small business bounded by the same legal protections for corporations it does not require as much annual paperwork.
- If you know the right people, you also have the liberty to choose wisely and strategically your partners and employees. There is no limit in the number of members you wish to join your business. In fact your members will have the flexibility to help in the design and structure of the company management which could provide positive impact.
- For debts and liabilities, LLC will protect your home or personal bank account from claims against the business, including lawsuits. However, you and your members must be careful as you may still be held liable due to negligence causing damages to a third party or a breach of your duties to your LLC.
- With LLC, there is more savings as it offers tax flexibility through the “pass through” treatment. There will be no double income tax deduction because this treatment allows allocated profit on the member’s individual income to be taxed only once. However, profits may be subject to self-employment taxes. This is so because LLCs are not considered employees and are still required to pay a separate and additional tax for Social Security and Medicare tax also known as FICA Tax.
In deciding what to do next, no matter how big or small your plan is, it is important that you are guided and well informed about the ins and out of setting up the business.