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Limited liability company for self-employed and small businesses

On Behalf of | Aug 13, 2020 | Business Law

A business owner in New York has several responsibilities. One of them is picking the best company structure for legal and tax purposes. A popular option has become the limited liability company, or LLC, for those who are self-employed. This is also a viable option for small businesses. Business owners have to protect their personal assets against potential litigation, and an LLC shields the owner. Plus, it provides some tax benefits for the owner.

To fully activate an LLC, a business owner does have to research their state’s laws. Business law for LLCs varies by state, so some leg work should be completed before submitting the paperwork to the appropriate government agencies. In terms of taxes, the IRS requires the business as well as any members of the LLC to file the appropriate tax documents, too. Members of an LLC can be any entity including individuals, corporations and foreign entities. An LLC can also be a single member.

The paperwork that is officially filed with the IRS determines how the IRS will treat the LLC. Therefore, it is important to submit the information in a timely manner. Also, business owners and members of the LLC are encouraged to be thorough and clear. There is no reason to cause any delays, especially when it comes the company’s taxes as delays could be costly.

Business owners who need guidance may consult with a legal professional who is well-versed in the state’s LLC rules and regulations. Leaving research and the compilation of business documents up to a professional opens up the entrepreneur’s time and allows him or her to place more focus on growing the company.