LLC costs are low compared with other types of business entities. This makes the LLC ideal for small business owners who do not yet have a lot of capital to invest in forming their business. Minimizing your initial costs will help to make your business profitable as soon as possible. You should know exactly how much an LLC costs before you start the process of setting up your limited liability company. If possible, you may even want to investigate LLC costs by state to determine if a neighboring state is less expensive.
You can form an LLC yourself even if you have no formal legal or business training. A limited liability company is the easiest type of business entity to create and requires only five steps:
- Choose a business name that complies with state law
- File your Articles of Organization and pay the applicable filing fee
- Draft an operating agreement
- Publish notice of your intent to form a limited liability company
- Gather any required licenses or permits needed by your business area
A Professional Limited Liability Company (PLLC) is similar to a professional corporation. Both are organized to provide professional services. Professionals — such as accountants, architects, lawyers, engineers, chiropractors, dentists, and doctors — are permitted in many states to form a standard LLC. However, some states require that these individuals form a PLLC, a similar but distinct entity from the limited liability company. If your state offers the PLLC entity and your industry is one that requires a license from the state, you may consider forming a professional LLC.
You are permitted to form an LLC in any U.S. state regardless of where you reside or where you intend to do business. Though some states offer more advantages to LLC owners, there are two negatives to creating an LLC in other states: you must register as a foreign LLC in each state you intend to conduct business, and you must designate a registered agent in the state in which you started your LLC.
There are two states commonly touted as the best for LLC formation: Delaware and Nevada.
Despite what the graphic may imply, uneven ownership in an LLC does not necessarily mean an unfair distribution; there may be a number of reasons LLC members may decide to own an unequal share in the company. For instance, some members may have contributed more capital to the LLC and therefore demand a larger ownership interest, or a member may be a silent partner and wish to contribute only a small amount to the company in exchange for a small share. Regardless of the reason, the LLC ownership structure is flexible enough to allow for any distribution of ownership among the members.