Have you ever wondered how to protect your personal assets? A limited liability company is a great way to protect those assets that mean the most to you!
I am here to walk you through every step of the way. I am not an attorney and cannot provide legal advice, however, I can assist you with preparing the documents necessary to get your LLC up and running. Here is exactly what I would be assisting you with:
Verifying the name of the LLC is available with the State you want to file in
Preparing the Certificate of Organization for the LLC
Filing of the Certificate of Organization with the State
Applying for an Employer Identification Number (EIN) with the IRS
Preparing and filing IRS Form 2553, if you desire to elect S-Corp status
Operating Agreement or Guidelines showing the Management, Membership, and other general guidelines of the LLC
Email me at ProtectYourAssetsUtah@gmail.com to get started today!
Reasons why a limited liability company (LLC) may be right for you:
Liability Protection
Let's hope you never get sued or have a creditor come after you, but everyone always thinks "It won't happen to me" right? Say your tenant has a carbon monoxide leak or falls on that cracked step, you may be liable as the owner! If/when this happens, the tenant may come after your assets for retribution. If your rental property is held in an LLC, the tenant can theoretically only come after the assets of the LLC itself and not your other personal assets, like your home and bank accounts.
Tax Flexibility
If you own 100% of the LLC (or jointly with your spouse), the LLC is classified as a "disregarded" or "passed-through" entity for tax purposes. This means that you can list the income and expenses of the LLC on your personal income tax return. No separate tax return is required. Super convenient!
Credibility
Whether you are running a side hustle to make some extra cash, renting something out to the general public, or providing consulting to others for something you are passionate about - having your business in the name of an LLC provides an extra level of credibility. This shows your customers that you take your business seriously. This could be a deciding factor for someone deciding between you and the competition.
Structure
When most people think about setting up a company, it may seem daunting and you may not know where to even start. One nice thing is that LLCs do not have as many state imposed compliance requirements and ongoing formalities like corporations and partnerships do.
Ownership Flexibility
The Members (owners) of the LLC can be individuals, partnerships, trusts or corporations. To add any new Members, all of the Members must simply agree to this and acknowledge that their ownership percentage will be changed.
*LLCs that are classified as S-corporations are more restricted on the number of Members.
Ease
The process of setting up an LLC is fairly easy and straight forward. In most states, an LLC is also inexpensive to file and maintain.
Reminders when using an LLC to run your business:
Keep it Separate. You will want to ensure that all of the income and expenses of the business are kept separate from your personal finances. If income and expenses are co-mingled, there could be an argument that the business is ran by you personally and not the LLC. In order to keep the liability protection, you need to show that all business income and expenses are ran through the name of the LLC and not your personal name.
Open a separate Bank Account. Once the LLC has been set up with the State and IRS, you will want to open a bank account in the name of the LLC. A business credit card can also be used to keep personal and business transactions separate, as well as to help build business credit. The financial institution will ask for a copy of the Articles of Organization or Certificate of Organization which were filed with the State, the Operating Agreement and the Employer Identification Number.
Payments. Whether it be rent payments or payments made to you by customers of your business, have those payments be made payable to the LLC and not to you.
Keep Track. Once you start receiving income and obtaining expenses relating to the LLC, keep track of these for tax reporting purposes.
Renew Yearly. Make sure that you (or who you have designated as Registered Agent) is renewing the LLC with the State every year.