An LLC is a Limited Liability Company or Incorporation. If you are looking at safeguarding your personal assets, you are advised to consider this business structure.
Forming an LLC is the only the beginning. After doing your homework, if you decide to go for it, you should go through with it quickly because there are plenty of things to do even after the LLC is formed. This is because simply becoming an LLC will not give you the liberty to start your business. You have to take additional steps as well.
License and Permits
Forming an LLC does not give you the license. You have to apply for the license and permits separately. If you don’t obtain the license you will be fined. Only when you attain a license after forming an LLC will you have the right to start functioning. The license(s) needed will depend on your geographic location. This is why it is advised that you do your homework and look at the local, state, and federal norms for the same.
Likewise, you need a seller’s permit. Every business that sells products that need to be taxed must have a seller’s permit. Only when you have this permit are you at liberty to sell.
Employer Identification Number (EIN)
EIN or tax ID number is very important because it is a means to track your business and all its transactions. And EIN is mandatory for every business that has employees.
Business Bank Account
You cannot use your personal bank account for any business transactions. Along with a business bank account you may also want a business credit card so that at the end of the year, tax filing comes easy for you.
Of course, being incorporation will keep your personal assets safe but your business is still at risk when you have losses. Thus, insuring your business will help you safeguard it. You need product liability insurance if you sell products and professional liability policy if you sell services.
Doing Business As (DBA)
If you are going to do business under a name that is different from the official company name, you will need a DBA filing. For each name that you want to do business under, you will have to file a DBA.
Go through with these processes as soon as you become an LLC and start your business smoothly.
After becoming incorporation or LLC you have to take a number of necessary steps such as getting the required licenses and permits, the EIN, the DBA, and the business bank account. These steps are important to ensure that your business runs smoothly.