le taxation. A partnership or sole proprietorship can change to an LLC and protect personal assets with no further changes to business income taxation.
What Is Limited Liability?
Simply put, limited liability means that anyone associated with the business isn’t liable for damages in excess of their upfront investment. A person is investing in an LLC only risks their own money, and does not have to make further payments if the business is in debt. However, being part of an LLC does not protect a business owner from liability associated with negligence.
Who Can Benefit From LLC Formation?
An organization or business owner worried about debt or litigation should consider hiring a business attorney in Williston ND for LLC formation. If a person believes their business coverage is insufficient, an LLC might be an advantage. Businesses operating in the insurance, trust and banking industries cannot form LLCs, and in certain jurisdictions, physicians, architects and accountants cannot form an LLC.
Forming an LLC
A person can create an LLC by filing with the state’s Secretary of State office, and by paying a filing fee. The articles are a simple form that can be filled quickly, and the form is available online. Some areas require business owners to publish their intent to form an LLC in the newspaper, and to prepare an operating agreement.
How are LLCs Different From Limited Partnerships?
The main difference is in the level of control. In limited partnerships, partners’ liability is limited unless they control the actions of the company. In an LLC, a person’s liability is limited regardless of the extent of their control over the company. Partnerships and LLCs are equal as far as taxation is concerned, and business owners must report income and losses on their personal income tax return.
Does a Business Owner Need a Lawyer With LLC Experience?
Starting a new business is potentially lucrative but very difficult. To understand the business’ rights, it’s best for owners to consult a Business Attorney in Williston ND. A Business Attorney with LLC knowledge can help the owner incorporate the business, and they can explain the organizational and tax benefits of the LLC structure.