What You Should Know About Forming A Limited Liability Company
When starting or expanding your business, the correct structure can make a world of difference to your operations. Knowing what distinguishes different structures can significantly impact efficiency, taxes, depreciation and other critical areas. All of these affect your bottom line. If you need help structuring your company as an LLC, please read on, then contact an experienced Bergen County, NJ business formation attorney to learn what you should know about forming a limited liability company.
What you should know about forming a limited liability company
First off, you should know that a limited liability company is a business structure that protects its owners from personal responsibility for its debts or liabilities. Such businesses are hybrid entities that combine the characteristics of a corporation with those of a partnership or sole proprietorship. A limited liability company offers the following benefits:
- Personal asset protection
- Pass-through taxation
- Simplicity
- Flexibility
- Credibility
Are there any disadvantages to forming a limited liability company?
There are two major disadvantages to forming a limited liability company. The first one is that it generally costs more to form and operate an LLC than to be a sole proprietor or have a partnership. You must pay filing fees to legally establish your limited liability company. Once your LLC is formed, you will then have to pay annual fees and taxes to the state. In New Jersey, it costs $125 dollars to form an LLC and $75 per year to operate it. The second disadvantage is that it hinders your ability to receive outside investments. It’s more complicated than investing in a corporation, which can issue stock in exchange for investors’ money.
Why do you need a business formation attorney?
Forming a limited liability company, or any business for that matter is a costly, time-intensive process. You would be well-advised to reach out to a skilled Bergen County, NJ business formation attorney who will assist you in naming your limited liability company, choosing a registered agent, filing its Articles of Organization, creating an Operating Agreement and getting your company an Employer Identification Number (EIN). All of this may require time and expertise you do not possess, so having the right representation and guidance can help prevent you from ever facing the huge and expensive problems that can cripple your business. A qualified legal representative will iron out the fine details and handle the heavy lifting.
Contact our Firm
The Law Offices of Richard E. Novak, LLC has over 25 years of experience helping clients through tough times when they need it most. If you need assistance with any intellectual property, traffic violations, or business law matters, our firm is here to help. It is critical that you pick the right attorney who can protect your rights. Contact The Law Offices of Richard E. Novak, LLC for a consultation.