What is an LLC?
Before you set up an LLC, you have to understand what is it? LLC is a term used to describe a limited liability company. It is a type of business that differentiates the person and the company. This distinction protects personal liability to business owners. The LLC can be described as a hybrid type since it blends structure and tax flexibility from a sole-proprietorship and the asset and liability protection offered by the corporate.
In the case of sole proprietorships and. LLCs ‘ sole proprietorships are a better choice due to their easier tax filing compared to other business structures. Owners can transfer business tax in their tax return and their income is taxed once. The drawback of sole proprietorships is that because the owner and the business are considered to be the same legal entity, the owners are 100 completely accountable for any debts and lawsuits brought by the business and could put personal assets in danger. Establishing an LLC creates a legal separation between business and owner similar to a corporation–offering business owners a layer of personal asset protection.
- Sole Proprietorship or Single Member LLC: Single-member LLCs, as well as sole proprietorships, are owned by one person. Single-member LLCs can employ employees however sole proprietors cannot. Owners can get around the double taxation issue by taking company taxes as part of their tax returns. Sole proprietorships do not offer protection from personal liability.
General Partnership General Partnership
- General Partnership General Partnership: A general partnership is an informal business arrangement that allows two or more individuals can operate and manage the LLC equally. This means that they equally share the company’s gains and losses. Every partner is legally the same entity as the company which means there’s no personal liability protection for partners in general partnerships. However, partners can transfer business transactions on their tax returns.
- Family Limited Partnerships: Family-owned partnerships, also known as FLPs, are created by family members who mix resources to start and run an enterprise. FLPs generally have two types of owners: general partner and limited partnership. General partners are accountable for operations, whereas limited partners do not have any management responsibilities, however, they can invest in the business to earn an income. They’re a popular choice for families looking to pass on wealth generationally.
- Series LLC Series LLC: A series LLC is an organizational structure that allows the owner to segregate assets and operations of the business into various subsets, referred to as series. A series LLC lets each subset operate like a normal LLC as well as shielding each series from liability that the other one could be liable for. Some states do not allow series LLCs. So make sure you check with your state legislature.
- L3C Company A: L3C company: L3C which is a low-profit limited liability company is a hybrid company that combines the aspects of both an LLC as well as a nonprofit company. While L3Cs are permitted to make a profit, this money is to be used to support the cause of charity. Some states do not recognize this business model.
- Member-Managed LLC, also known as Manager-Managed LLC: Manager-managed or member-managed LLCs are, without a doubt, referring to the way an LLC is managed. An LLC managed by members is one in which the owners, also known as members, are responsible for the day-to-day operations. Members-managed LLCs are typical for small – to mid-sized companies. The manager-managed LLC structure is more frequent for larger businesses or owners who prefer an easier managing position. In this scenario, members could designate one or more of them to oversee day-to-day activities or recruit employees to handle the responsibilities.
What is the reason to form an LLC?
There are many advantages of forming an LLC. It’s a very simple and cost-effective procedure, which is the ideal starting point for making your online store “official.” This validation could affect your status as a business owner, as well as create confidence with you as a “legit” brand in the eye of potential customers. Being able to prove your business is a good idea, as it can help you secure additional funding from outside sources, like lenders or investors, and even potential business partners in the future.
How to create an LLC
Choose your name
Naming your LLC is essential for administrative reasons, but also your clients. Your company’s initial impression is what that person is likely to have of your company and you must create the perfect one.
Naming your online store’s name can require some time. The perfect name isn’t something that happens in a flash. Sometimes, it’s a process of brainstorming, and sometimes even collaboration. There are many free tools, such as Shopify’s business names generator which can help you get your creative juices flowing.
When you’ve settled on an address, conduct an exhaustive check to ensure that no one else has claimed it initially. There are many business directories in states that you can browse. You should also look beyond your state, particularly if you are planning to market to a large public. Check Google and social media and domain names available to discover what’s available.
Get an EIN
Employer ID Number (EIN) distinguishes the personal you from your company identity. It functions as your company’s Social Security number (SSN) in a way, that is to say. It’s a unique number that the government uses for identifying your LLC.
To obtain an EIN To get an EIN, you must visit the IRS website and complete an application online. It’s free, however, you’ll need to provide your private Taxpayer identification number. The process takes less than 15 minutes and is entirely online. You’ll receive your EIN right away after the process’s completion.
Register your business
Once you’ve obtained your EIN and the name of your business It’s time to declare everything. The process of registering your business is easy, but there are additional procedures for businesses that operate in specific industries such as food and drink or CBD. You might also have to get a license for your business according to your field of expertise and your location.
Open a bank account
It’s much easier to keep both your personal and business financials separated. Separating the accounts also offers greater protection for the personal belongings you own. You’ll need business details, such as your EIN to open an account at a bank for business.
Create and launch your site
If you’re ready to showcase your brand new business to the rest of the world it’s time to start promoting and launching your store online. We’ve developed a useful Shopify checklist for the launch of your store to assist you in keeping track of everything from inventory to marketing to fulfillment. Increase traffic to your website for your first sale.
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Going forward on your LLC
An LLC’s formation can provide the potential for financial benefits and even mental advantages for your e-commerce business. After you’ve created your LLC you’re able to focus on the essential aspects of your company, and take the business where you want to take it.
How Do I Combine Multiple Blogs Under One Business Entity? What Are My Other Options?
If you’re blogging you’re probably thinking about whether you should create a company to run your blog. If you manage two blogs, you’re probably asking more questions, ranging from “How do I merge two blogs?” To “Should I turn my second blog into a DBA, subsidiary, or LLC? “
To help you understand to make things easier for you, we’ve provided the essential information you should be aware of. If you’re not sure the best way to start a business even if you’re thinking of setting up a subsidiary to your blog’s existing entity the answers you’ve been looking for are right here.
Do You Need to Form a Business for Your Blog?
The first thing to consider is should you establish a legal entity for your blog? For this to be answered, you’ll have to figure out if your blog is financially viable and, if yes to what degree.
In essence, if your blog is earning revenue and you are planning to grow it further and grow, then you must consider making it an enterprise and take it seriously as an entity. This means that you should keep the track of your budget and taxes as you do with small-sized businesses and make a business plan for your blog to achieve your goals.
It is possible to make your blog financially profitable in a variety of ways. For instance:
- Content sponsored by sponsors: It happens the time when you and another business can agree to sponsor a blog article. You could be paid for a one-time flat fee or be paid according to the number of views and clicks.
- If you own an online cooking blog for example you could offer cookbooks or even meal preparation services.
If that’s the scenario, you’ll probably want to create a company for your blog to reduce tax burdens for you.
To do this you’ll have to choose the correct kind of business entity that is right to suit your needs.
Choosing a Legal Entity for a Blog
Because blogs are available in virtually infinite dimensions and shapes and shapes, it’s no surprise that there isn’t a way to create a single-size blog company.
When evaluating businesses for your blog, you’ll have the ability to pick from a variety of choices.
- A sole proprietorship is a sole proprietorship where you continue to manage your blog in your name, without having to complete any formal setup (or getting any legal liability security).
- Limited Liability Company (LLC) that allows you to create your blog as your own company and have total control over it while safeguarding the personal belongings of your site.
- An S Corporation is a way in which you can establish your blog as an independent company and safeguard your assets so when you’ve got less than 100 shareholders.
Which one is right for you? You’ll probably be content by a sole proprietorship if you
- Are you willing to place your assets on the line
- Manage your business completely by yourself
- Do not wish to fill in any forms
- Do not want to sign a formal agreement to form an organization
In contrast, you might consider turning your website into an LLC if:
- Need legal liability protection
- Do you want to establish credibility with any potential partners or customers
- You can run your business by yourself or with partners
- Are you looking to segregate your assets from the business?
- Do not have or expect ever have shareholders
Then An S company could be the best option when you are looking to incorporate your blog into an LLC, but do not already have or plan to have shareholders.
How Do I Merge Two Blogs Under One Business Entity?
It’s not unusual that bloggers have several blogs, and it’s not unusual that YouTubers have multiple YouTube channels.
- Fictitious name
- Trade name
- Assumed name
This means that you don’t get any tax advantages (or suffer any disadvantages).
What Are My Other Options?
In these cases you can segregate your two blogs using one of the following:
- The creation of a distinct business entity, like an LLC for each blog.