Online New York LLC

What is a limited liability company?

A limited liability company, commonly called an “LLC,” is a business structure that is similar to a corporation, but less formal. Business owners form LLCs to protect themselves from being personally liable for business debts.

LLCs combine the pass-through taxation of a partnership or sole proprietorship with the limited liability of a corporation. As in a partnership or sole proprietorship, income “passes through” the LLC to the LLC owners, and the owners report the business’s income on their personal income tax returns. Unlike a corporation, the LLC itself is not a separate taxable entity.

Like owners of a corporation, however, all LLC owners are protected from personal liability for business debts and claims—a feature known as “limited liability.” This means that if the business owes money or faces a lawsuit for some other reason, only the assets of the business itself are at risk. Creditors usually can’t reach the personal assets of the LLC owners, such as a house or car. (However, both LLC owners and corporate shareholders can lose this protection by acting illegally, unethically, or irresponsibly.)

For these reasons, many people say the LLC combines the best of partnerships and corporations.

The decision to form an LLC is an important one. Like a corporation, an LLC is meant to be a permanent legal entity, and it will exist—and incur taxes and fees, whether or not you are actively operating a business—until you take legal steps to dissolve it.

Online California Corporation

Save money and time with the Online California Corporation formation application. Our easy-to-use service helps you form your LLC directly online without the costly attorney fees. Pick a package, complete a comprehensive interview online, follow our step-by-step instructions, and leave the rest to us. We file your articles of incorporation with the California Secretary of State for you and your corporation will come into existence the day they’re filed.

How do I form a corporation in California?

In California, you create a corporation by filing “articles of incorporation” with the Secretary of State’s office and paying a filing fee. You’ll also need corporate bylaws and resolutions signed by the board of directors, though these documents don’t need to be filed with the Secretary of State. Your bylaws explicitly state the rights and responsibilities of the shareholders and directors and govern how your corporation will be run.

After your articles of incorporation have been filed and you sign corporate bylaws, your corporation is official, but you will still need to obtain the licenses and permits that all new businesses must have to operate. These may include a business license (sometimes also referred to as a “tax registration certificate”), a federal employer identification number, a sellers’ permit, or a zoning permit. Forming a corporation does not exempt you from any of these requirements that apply to all businesses.