Limited Liability Company Formation Lawyer Overland Park
At the Dorsch Law Firm, we understand how important your business is to you. Establishing a Limited Liability Company (LLC) is one way to protect your valuable assets, to reduce taxes, to increase credibility, and all with fewer restrictions than some other business organization types.
A Limited Liability Company is a type of business organization that combines some of the elements of a corporation with those of a sole proprietorship or partnership. Like a corporation, the personal liability of the company’s members is limited – thus the name.
Our firm will set up and maintain your LLC structure
Our firm will set up and maintain your LLC structure for your small business in accordance with all state and federal laws so that you can enjoy the benefits that structuring your business in this way provides, including:
- Protection of your assets. As a business owner, having an LLC provides limited liability protection that is unavailable to sole proprietors and general partnerships. What this means is that creditors cannot pursue the personal assets (such as houses, savings accounts, etc.) of owners in order to pay debts belonging to the business.
- Pass-through taxation. LLCs do not pay business taxes since business income is passed through to owners. This means that the organization itself does not have to file a separate tax return or pay taxes; profits or losses are reported by the owner at the individual income tax level on Schedule C.
- Heightened credibility with potential customers, vendors, employees, and other businesses.
- Flexible management structure. Unlike corporations, LLCs have the freedom to establish organizational structures agreed upon by the business owner(s) since there is no board of directors required to oversee major business decisions of the company.
- Fewer restrictions. Unlike S corps, there are few restrictions on who can establish an LLC or how many owners an LLC may have.
- Limited state compliance requirements. LLCs also face fewer state imposed annual requirements on the state level than S or C corporations.
The Limited Liability Company is actually a fairly new structure in the United States, intended as a way to help small businesses enjoy many of the same benefits corporations do, while allowing them to retain their small business model of ownership.
A traditional corporation requires a number of things that a Limited Liability Company does not need to create. For example, corporations have shareholders, and must meet a certain number of times per year at meetings to make decisions and keep records (take minutes) of what is discussed at these meetings. An LLC, on the other hand, does not have shareholders and does not require such meetings. Additionally, an LLC does not need to create a set of bylaws.
The LLC model is a good alternative to a sole proprietorship as it still allows the small business to retain many of the perks of being incorporated while reducing potential liability. An LLC may in fact choose its own tax status, deciding whether to be treated as a sole proprietorship, or an S or C corporation.
Understanding the limitations of liability are of course very important, and there are some potential disadvantages of an LLC, including:
- Formation and ongoing expenses. In order to form an LLC, you must file Articles of Organization with the state and pay the applicable state filing fees. Many states impose annual fees, require yearly reports, and/or charge franchise tax fees. This is not the case for a sole proprietorship, but the benefits should outweigh the cost as these fees are typically not excessive.
- Transfer of ownership tends to be more difficult than with a corporation, since all owners must approve adding or altering ownership percentages of existing owners.
While an LLC is the obvious choice for many business owners, for others it may not be the best choice. It is true that the accounting and paperwork involved in creating a Limited Liability Company and handling its taxes are much easier to deal with than those of a corporation, but they are nonetheless more complex than those of a simple sole proprietorship or partnership.
For this reason, it is important to have a professional help you explore all your options thoroughly and then advise you when it comes to setting up the best structure for you. At the Dorsch Law Firm, you can rest assured that helping you to build your business is part of our core values and services.
For more information on setting up a Limited Liability Company in Missouri or Kansas, please contact our office today or call (913) 685-9190.