TextSearch

A Limited Liability Company (LLC) is a relatively new legal structure available for a business. As its name indicates, an LLC offers protection for the owners, or members as they are called, who have limited liability in regard to financial obligations arising from their company’s operations. An LLC…

How to Operate an LLC | Bizfluent Skip to content Skip to site index ► START Your Business FINANCE Your Business MANAGE Your Business How to Operate an LLC by Pat Fontana Published on 26 Sep 2017 A Limited Liability Company (LLC) is a relatively new legal structure available for a business. As its name indicates, an LLC offers protection for the owners, or members as they are called, who have limited liability in regard to financial obligations arising from their company’s operations. An LLC can consist of a single member in most states. This article provides information on operating an LLC, from forming the company to complying with paperwork and tax requirements. Step 1. Determine whether you will be a single person LLC or if you will bring in other members or owners. Most states allow LLCs to operate with one member. Step 2. File your Articles of Organization with your state’s Department of the Secretary of State. Each state requires a filing fee and several days to process the paperwork. Step 3. Write your Operating Agreement. Collaborate with the other members of your LLC to determine how you will operate, how your management will be structured, and how decisions will be made for the company. Step 4. Set up an employee withholding tax system, which will include issuing W-2s or 1099s for employees and consultants. According to the Internal Revenue Service, if you are a single member LLC with no employees you can file a simple Schedule C; however, if you have multiple members you will be required to file a partnership return. Step 5. Include LLC behind your company name everywhere it appears, such as on your business cards, letterhead, promotional materials, and website. When writing contracts and employee agreements, in particular, specify that your company is an LLC and provide details on the liability protection that legal structure provides. Tip Put everything in writing, including your Operating Agreement and employee agreements. Keep tax records current and ensure that you are completing the appropriate returns for your organization. Warning Members are responsible for their own self-employment tax. related resources writer feedback cite Does an LLC Need a Separate Tax... LLC and Payroll PLLC vs. LLC Definition of a Managing Partner... What Is the Difference Between... How to Find a LLC Tax ID Number How to Change Name of an LLC How to Change the Ownership of... Penalty for Not Filing IRS Form... Tax Issues for Limited Liability Companies Pat Fontana began her career in 1981. Her extensive experience includes work in small business, entrepreneurship, marketing communications, adult education and training. She has written for Entrepreneur, Atlantic Publishing and other clients. Fontana earned a Master's degree in English with a concentration in Technical and Professional Communications from East Carolina University. Did you find this page helpful? 👍 👎 Cite this Article Whether you are starting your first company or you are a dedicated entrepreneur diving into a new venture, Bizfluent is here to equip you with the tactics, tools and information to establish and run your ventures. Bizfluent About Contact Careers Advertise Legal Terms of Use Privacy Policy Copyright Policy Accessbility Do Not Sell My Personal Information © 2023 Leaf Group Ltd. / Leaf Group Media, All Rights Reserved. Do Not Sell My Personal InformationYour PrivacyYour PrivacyWhen you visit our website, we store cookies on your browser to collect information. The information collected might relate to you, your preferences or your device, and is mostly used to make the site work as you expect it to and to provide a more personalized web experience. However, you can choose not to allow certain types of cookies, which may impact your experience of the site and the services we are able to offer. Click on the different category headings to find out more and change our default settings according to your preference. You cannot opt-out of our First Party Strictly Necessary Cookies as they are deployed in order to ensure the proper functioning of our website (such as prompting the cookie banner and remembering your settings, to log into your account, to redirect you when you log out, etc.). For more information about the First and Third Party Cookies used please follow this link. More informationStrictly Necessary CookiesStrictly Necessary CookiesAlways Active Strictly Necessary CookiesThese cookies are necessary for the website to function and cannot be switched off in our systems. They are usually only set in response to actions made by you which amount to a request for services, such as setting your privacy preferences, logging in or filling in forms.    You can set your browser to block or alert you about these cookies, but some parts of the site will not then work. These cookies do not store any personally identifiable information.Sale of Personal DataSale of Personal Data Sale of Personal DataUnder the California Consumer Privacy Act, you have the right to opt-out of the sale of your personal information to third parties. These cookies collect information for analytics and to personalize your experience with targeted ads. You may exercise your right to opt out of the sale of personal information by using this toggle switch. If you opt out we will not be able to offer you personalised ads and will not hand over your personal information to any third parties. Additionally, you may contact our legal department for further clarification about your rights as a California consumer by using this Exercise My Rights link. If you have enabled privacy controls on your browser (such as a plugin), we have to take that as a valid request to opt-out. Therefore we would not be able to track your activity through the web. This may affect our ability to personalize ads according to your preferences.Performance Cookies Targeting CookiesThese cookies allow us to count visits and traffic sources so we can measure and improve the performance of our site. They help us to know which pages are the most and least popular and see how visitors move around the site.    All information these cookies collect is aggregated and therefore anonymous. If you do not allow these cookies we will not know when you have visited our site, and will not be able to monitor its performance.Targeting Cookies Targeting CookiesThese cookies may be set through our site by our advertising partners. They may be used by those companies to build a profile of your interests and show you relevant adverts on other sites.    They do not store directly personal information, but are based on uniquely identifying your browser and internet device. If you do not allow these cookies, you will experience less targeted advertising.Back ButtonAdvertising Cookies Filter ButtonConsent Leg.Interest Select All Vendors Select All Vendors Select All HostsSelect AllClear Filters Information storage and accessApplyConfirm My Choices Allow All