Questions? We have the answers?

Do I need an LLC?

Limited liability companies (“LLCs”) are the most common asset protection tool for startup and small business owners. By conducting your business through an LLC rather than in your personal name, you may be personally protected from business debts and liabilities, plus you have additional business tax deductions, and your entity is recognized as being more professional when seeking loans, partnerships, joint ventures, etc. Having a business entity such as an LLC is highly encouraged for your benefit and protection.

What are the steps for forming my LLC?

If you have an idea for a name you would like to use, we will do an initial availability search. If you are still deciding on a name, you can identify a name after you have completed our short questionnaire. We will also review and confirm all the details to submit with your business registration. Once you have decided on an available name, we will quickly prepare your Articles of Organization and submit them to the Secretary of State to register your LLC. And for the final step, we will complete any additional documents you ordered such as your Operating Agreement or your Federal EIN. Your steps will be minimal, our team will complete the rest.

Is there a difference between an LLC and a corporation (Inc)?

LLCs and corporations are both limited liability entities, meaning that owners are not personally liable for the debts and obligations of the entity. There are some differences between the two entities, most importantly, LLCs are much easier and simpler to own and operate than corporations making them a common choice for startup and small businesses.

Are LLC’s taxed like a corporation?

Unlike a C Corporation, LLCs can be taxed as a “pass through entity,” where the LLC passes its net income (or net loss) to its members as a “distribution.” This avoids the “double taxation” that is common in a C Corporation. Veil recommends you work closely with a competent tax professional with knowledge of your industry (Hyperlink to tax page) to make decisions related to the taxation of your entities.

Are there any limitations in naming my LLC?

Do I have to use “LLC” in the name? All states require that you include the designation “LLC” or some variation, like spelling out “Limited Liability Company” in your name to distinguish it as an LLC. Beyond that, you can choose, or even make up a name, subject to verification that the name has not been registered by another business in the state where you register your business.

Who manages an LLC?

Is a Board of Directors required? LLC structure is a group of self-employed individuals called members. In a multi-member LLC, the members can choose one member to be the Managing Member, or the LLC can choose and hire an outside person as an employee to become the manager. And an LLC does not need a board of directors.

Do LLC’s need a partnership agreement?

A multiple-member LLC is taxed as a partnership, but an LLC should manage operations through an Operating Agreement, which functions in similar way as a partnership agreement but is just called by a different name. A partnership/operating agreement can be a vital part in assigning responsibilities, setting limits on individual authority, and managing disputes, dissolution, etc.

What requirements are there for bank accounts for LLCs?

Minimally, you will need a business checking account, and possibly other accounts for your business. Make sure these are completely separated from your personal accounts in order not to violate co-mingling requirements. Most banks will require your personal ID for any members who will be signatories on the account and the Articles of Incorporation/state registration and EIN number for the business. Do not worry, the Veil team will be ready to provide you with the business documents.

If I own more than one business or real estate properties, should I put each business into its own LLC?

Many entrepreneurs own multiple businesses or real estate investment and have their own rules regarding how to segregate business assets. Most importantly, any decision regarding multiple entities should limit liability for the company’s assets, assist in tax filing, and aid in proper management of the business and its assets. The best answer is to schedule right away with the team so they can direct you to the right attorney and resources you need.

Are there some personal risks for which a Limited Liability Company does not provide protections?

The short answer is Trust Fund Taxes, Personal Conduct, and Personal Guaranties. In establishing entities, you should also consult with attorneys to establish your own personal liability protections.

Is it possible to set up an LLC myself with my state’s Division of Corporations?

Yes, but we encourage you to do extensive research. Most “do it yourself” websites do not consider the individual needs of widely varying businesses. There are many “do it yourself” projects we can tackle, but matters of legal consequence are usually not one of them.

What is the Ownership and Voting Structure for LLC’s?

Owners of an LLC are called members. Membership and voting are usually divided on percentage. A single-owner LLC contains one member who has 100% ownership. A three member LLC might contain one owner who has a 50% share and two owners who each own a 25% share.

What if our business will be conducting business operations in multiple states?

Some businesses have or develop operations in multiple states. If this is the case, Veil can assist you to file a domestic registration for your LLC in your preferred state. We can also assist you to register as a “foreign” entity doing business in other states. Please contact us for a custom quote.