What is an LLC?

The Limited Liability Company is a relatively new entity type that was developed towards the end of the 20^th century as an alternative to a corporation. Modeled after a German entity type (GmBH), the US LLC originated in Wyoming in the late 1970s, emerged in Florida a decade later and by the early 1990s existed in all US jurisdictions. Since that time limited liability companies have steadily gained in popularity largely because they combine liability protection previously reserved for corporations with single taxation of partnerships. LLCs also have fewer requirements than corporations making them easier to maintain. LLC's are separate and distinct from its owners who are called "members."  LLC's do not issue shares of stock like C Corporations and S Corporations. If you would like to read about S Corps and C Corps check out our blog here.

Ownership/ Member details about LLC's

There are 2 ways to reflect ownership of an LLC.  It can be reflected as a percentage or by membership units which are similar to shares of stock in a corporation. The number of members of an LLC is unlimited and members can be individuals, partnerships, corporations, trust, nonresident aliens, etc.

Things to know about LLC's

• Limited Liability- Absent any specific personal guarantees, the amount at risk for members is limited to their investment in the LLC. The personal assets of the members are generally beyond the reach of creditors. This protection is for all members of the LLC unlike an LLP where one general partner must remain liable for partnership debts. 
• Tax Benefits- LLC members may also enjoy the same flow-through tax benefits which are applicable to partners of a partnership.
• Easier to maintain- LLC's are not required to hold annual meeting and to record meeting minutes. LLC's are known for their operational ease.
• Heightened Credibility- Forming your company into an LLC can increase the credibility associated with your business.

What is a C Corporation?

A C Corp is legal structure that businesses establish that is a separate entity from the owners and the people that manage it. Corporations are owned by their shareholders, and provide owners limited liability. C Corporations are the most widely type of entity for businesses large and small that have shareholders. 

What's the difference between a C Corp and an S Corp?

All corporations both S and C are started as a C Corp. Once the C corp is formed the business has 75 days to to elect to become an S Corporation.  This election is done with the IRS. More information abour S Corporations can be found Here.

Some things to know if you're thinking about starting a C Corporation

1. C Corporations may have an unlimited amount of shareholders
2. Owners do not need to be citizens or residents of the United States
3. C Corporations shares may be owned by another business
4. C Corporations are required to have bylaws, hold annual meetings and keep accurate record of the meeting minutes. 
5. Corporations can raise capital by through the sale of their stock.

What is an S Corporation?

An S Corporation also know as S Corp is a legal entity described by IRS.gov as "a corporation that decides to pass income, loss, deductions, and credits to their shareholders." S corporations avoid the double taxation inherent to general business corporations, in which profits and dividends are both taxed.

How do I turn my business into an S Corp? 

All corporations are started first as C Corporations. After your C Corporation is started your company must elect to become an S Corporation with the IRS by signing IRS form 2553. 

Some things you need to know if you're starting an S Corp are

1. Limit of Shareholders- S Corporations are limited to 100 shareholders 
2. Shareholder Definitions- A new law allows "members of a family" to qualify as one, and defines "members of a family" as the common ancestor, the lineal descendants of the common ancestor, and the spouses or former spouses of the lineal descendants or common ancestor  
3. Stock Restrictions- S Corporations only have one class of stock
4. IRS filing- To obtain S Corporation status, all shareholders must sign IRS form 2553 which must be filed within 75 days of starting business. 

If you want to incorporate your company don't worry, American Incorporators Ltd. provides fast and easy incorporation for you so just give us a call at 800.421.2661 or check our our website for more details.

Incorporating your business can give you and the other owners of your business a number of benefits. For the benefits of incorporating you can look HERE. Incorporating your business can be an easy task with your friends at American Incorporators Ltd. to help you. It takes completing these simple tasks and we’ll be there to help you along the way

1)      To be a legal entity you must register your business name with the Secretary of State. If you have already thought of your name check it HERE to make sure it is available in your state.  If you do not already have a name, that’s okay think of a creative name for your business that will be attractive for customers.

2)      Decide what kind of entity you would like to incorporate. LLC, S Corp, C Corp and what state you would like to incorporate in. 

3)      Call Us- 800-421-2661

4)      Depending on your states regulations we could get your documentation and your business up and running in just a few days. 

If you want to download our "How To Incorporate a Business With American Incorporators Ltd" Guide click HERE

From July 15, 2014 until July 25, 2014 for every Facebook Post you share to your friends or every Tweet you retweet to your followers you'll be entered in our contest to win one Free, yes one FREE year of registered agent service in the state of your choice up to $149. Make sure to follow @AmericanIncLTD on twitter and like American Incorporators Ltd on Facebook to stay up do date with us.

For more details about the contest click the link here: http://hub.am/1rqRPK4

There are 5 Different types of entities than can own a business.

• C Corporation
• S Corporation 
• LLCs & LLPs 
• General Partnerships
• Sole Proprietorships

1. Limit the Liability and Protect the Assets of Owners
2. Increase Tax Savings 
3. Raise Capital 
4. Perpetual Existence
5. Simple Estate and Family Planning

 

When forming a business in Arizona, you’ll want to be mindful of certain requirements and potential restrictions. You will have the option to form a Corporation or a Limited Liability Company. Before you make your decisions, it’s best to understand the difference between the two, and how Arizona will treat your business formation.

Corporations 

Corporations will be required to have a name that is entirely distinguishable from any other business registered in the State of Arizona. The name of your business must also include a corporate identifier. For corporations, you can use “Association, Corporation, Company, Incorporated, Limited” or any abbreviations of those corporate identifiers.

Arizona does not require that you list a specific business purpose on your Certificate of Incorporation. They do require that you list at least one director on your Certificate of Incorporation. The State of Arizona does require publishing.

Limited Liability Companies

When forming an LLC an Arizona, your company name must also be different and distinguishable from any other registered authorized Arizona business entity or any reserved names on record. You’ll need to include a corporate identifier. LLCs can use “Limited Liability Company, Limited Company” or any abbreviation of these words.

LLCs are not required to list a specific purpose on your Certificate of Formation and are also not required to list members on their formation documents.

Both Corporations and Limited Liability Companies may have varying annual requirements. To keep up with Arizona’s requirements, we recommend visiting their Secretary of State website, or giving us a call.

If you’re a small business looking to get started in Arizona, The Arizona Commerce Authority is a great resource where you can learn about programs that can help you get your business up and running. Arizona businesses also recommend Arizona’s SBDC Maricopa County Colleagues division. 

If you're ready to form a business in Arizona, we offer incorporation and registered agent services. Either click below or call 800.421.2661 to get started!

This week, we’ll be covering the basics of forming a business in Alaska.

Like many states, Alaska requires that your corporation or limited liability company name be different from any registered business on file. Corporations and limited liability companies must also have a corporate name identifier. These identifiers include, “Corporation, Incorporated, Inc., and Corp.” For LLCs, you can use “Limited Liability Company or LLC.”

If you’re forming a corporation, Alaska does require that you list a specific business purpose on your Certificate of Incorporation. This means that you’ll have to provide a purpose for the general business you’ll be conducting. Alaska will require that you list one or more directors on the document. You must also be at least 19 years of age to form your business. Alaska’s standard number of shares is 1000, at no par value.

Limited Liability Companies are not required to list a specific purpose on their Articles of Formation. They do require that you list one or members on your document, and have an age requirement of 19 years or older.

Alaska may have annual filing requirements, often known as annual reports, for both corporations and limited liability companies. The filings may be due on a specific day or during a specific time and can cost varying amounts. For update annual requirement information, you can visit Alaska Secretary of State’s website.

If you want to learn more about current businesses in Alaska, take a look at Alaska Business Monthly.

Is your small business registered in Alaska? If we are acting as your registered agent, you can be featured in our Small Business Spotlight. Just comment your name and your company's name below!

Business travel can often be a perk of your job, but the events leading up to your departure can sometimes cause stress. In order to help you have a fully enjoyable experience, we’ve compiled this list of business travel tips and tricks to keep you on top of your game.

Plan

• Book your flight and hotel room well in advance. Take into consideration which airlines and hotels have the best frequent customer programs. Forbes rated Delta, Jetblue, and Virgin America as the top airlines for business travel in 2014. 

• Organize your transportation. If you’re planning on using a rental car, confirm your reservation. If you’re going to rely on public transportation or taxis, take note of their schedules. Taxi Magic is available in 60 US cities. It helps you with fare estimates, pick up scheduling, and taxi tracking.

• Create an itinerary so you’ll know when and where your meetings are. 

• Make sure you have proper travel documents, including your ID and passport. To be safe, make a copy to keep with you.

Prepare

• Review the area where you’ll be staying. Take note of any restaurants, convenience stores, coffee shops, or attractions nearby. A great app to help you with this is Yelp. 

• Check your destination’s weather to make sure you’re packing the right items.

• If you’re going out of the country, you may want consider checking your cell phone costs with your provider.

• Download the WiFi Finder app to help you locate wireless spots when you’ve reached your destination

Pack

• Invest in a lightweight, easy-to-move carry on. Checking bags will cost you time and on some airlines, money. 

• Plan your wardrobe. Taking neutral colors that work well together will give you more outfit options without over packing. Make sure you take a pair of shoes that will be comfortable for any leisure time you may have. 

• Consider placement. If you keep things you’ll want during the flight in outside compartments on your bag, it will be easier to reach. Purchasing a cord organizer can save you time if you’re traveling with many devices.

• Take backups. Having a backup cell phone charger can come in handy if you misplace your own. 

• If you must check a bag, make sure you take a carryon with essential items, including a change of clothes.

  Each week, we’ll be providing you with basic information on forming a corporation or limited liability company in a specific state. Today, we’ll get started with Alabama.

Forming a corporation or a limited liability company in Alabama can take a considerable amount of time longer than other states. If this is where you are conducting, we recommend you for in Alabama, despite the time it may take. 

Before beginning your initial filing document, you may be required to obtain a Certificate of Name Reservation from the State of Alabama. This filing will be sent to the judge of probate, who then forwards the filing to the Alabama Secretary of State.

Alabama requires that you include a corporate name identifier in your company’s name. Corporate identifiers for corporations include “Corporation, Incorporated, Inc., and Corp.” For LLCs, corporate identifiers include “Limited Liability Company or LLC.” Alabama also requires that your business name be distinguishable from any other registered or authorized Alabama business identity.

Alabama does not require that a specific purpose be listed on your formation document for both corporations and limited liability companies.  For corporations, Alabama requires that you have one or more Directors listed on your formation document, but does not require you to list any officers. For a Limited Liability Company’s formation document, Alabama requires that one or more managers or members be listed.

Keep in mind that Alabama may have annual filing requirements for both corporations and LLCs. These filings may be due on a certain date and may cost varying amounts. To be sure that you’re receiving up to date annual requirement information, you can check the Alabama Secretary of State website. You receive further information regarding these filings by calling 800.421.2661.

Alabama Business News is a great site if you’re interested in keeping up with business developments and your potential competition!