ACCOUNTINGANDREFUNDS.COM
Accounting Firm in Stone Mountain, GA
Next Steps After Starting Your LLC
STARTING AN LLC IS JUST THE BEGINNING Once your new company is registered and oficial, you still need to follow specific steps before opening for business. These include: 1. Create an operating agreement 2. Get an Employer Identification Number (EIN) 3. Learn more about LLC taxes 4. Get an accountant
5. Open business bank accounts and credit cards 6. Research and apply for business licenses and permits 7. Get insurance
CREATE AN OPERATING AGREEMENT
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An operating agreement is a legal document that outlines the ownership and member duties of an LLC. Some states (California, Delaware, Maine, Missouri, Nebraska, and New York) legally require LLCs to have an operating agreement, but it is optional in others. However, even if it is not a requirement in your state, we recommend having one! An operating agreement can help prevent or resolve disputes between LLC owners by specifying how to handle the various situations a business may or may not face. Also, if your business is a single-member LLC, an operating agreement can increase the credibility of your company and maintain its limited liability status.
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(678) 218-6433 | STONE MOUNTAIN, GA
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GET AN EMPLOYER IDENTIFICATION NUMBER (EIN) FROM THE IRS A corporation or LLC is a separate legal entity and requires its own EIN from the IRS. This is true whether or not you plan to hire employees. An EIN allows the IRS to track your business, just like an individual’s social security number. This should be one of the first steps after setting up an LLC. You cannot open a company bank account or file a tax return without an EIN number.
LEARN MORE ABOUT LLC TAXES
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Owning an LLC requires paying taxes, but you need to choose your LLC’s tax status and register with the necessary government ofices before you start paying. One of the advantages of an LLC is that owners have the flexibility to choose how the company is taxed. The best tax structure depends mainly on how much profit the business makes and the owner’s financial plans and goals for the company. Here are some common types of state taxes an LLC might have to pay:
• FRANCHISE TAX • SALES TAX • EMPLOYMENT TAX
• WITHHOLDING TAX • UNEMPLOYMENT INSURANCE TAX
OPEN A BUSINESS BANK ACCOUNT
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After you have an EIN, you can open a bank account for your business. Limited liability protection means that the owner’s personal assets are not in danger if the company is sued or goes into debt. Additionally, after registering or forming an LLC, the law requires you to separate your personal and business finances. This includes buying business supplies, accepting payments, and paying bills with your business banking account or credit card. However, this protection (sometimes referred to as the corporate veil) is not absolute and can be lost under certain circumstances. The easiest way to lose the personal protections of your LLC is to mix your personal and business finances. For this reason, you must open a business bank account and get a business credit card before you begin operating.
ACCOUNTINGANDREFUNDS.COM |
(678) 218-6433 | STONE MOUNTAIN, GA
HIRE A RELIABLE ACCOUNTANT
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A short meeting with a tax advisor can provide valuable insight into filing your taxes as a corporation or LLC. You can discuss whether you should opt for the IRS’ S-Corporation filing status and the additional deductions currently available. Many small business owners believe they can do their own accounting and don’t have to pay for professional services. However, hiring an accountant can save you money, stress, and potential legal problems in the long run. Benefits of hiring a reliable accountant:
• Helps prevent tax overpayment and avoid interest, fines, and other costly tax errors • Simplify accounting and payroll so you can spend more time on your growing business • Manage your business’s financing more effectively by identifying areas of unexpected losses or additional gains
APPLY FOR BUSINESS LICENSES & PERMITS
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Getting the correct business licenses and permits is one of the most important things after forming an LLC. This can sometimes be an intimidating step, as the business license and permit requirements vary considerably from state to state and even between counties and cities. Different types of businesses may also have other licensing requirements. There are three leading licensing jurisdictions: federal, state, and local . Contact your local county ofice or city hall after forming your LLC to determine what kinds of permits and licenses are necessary for your business type. This information will ensure you comply with local, state, and federal regulations, keep your liability protection intact, maintain accurate financial records, and attract customers to your business.
GET INSURANCE
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At a minimum, your LLC should probably have general liability insurance, which is a broad insurance policy that protects your business from lawsuits. Other insurance policies an LLC may need to depend on the type of business, if you have employees or not, and other factors. In addition general liability insurance, common types of business insurance include: workers’ compensation insurance, professional liability insurance, commercial property insurance, commercial auto insurance, and and various business owner’s policies. Plus, there are many other insurance policies, with some designed for specific business types. Completing these steps after setting up your LLC will help you comply with all applicable local, state, and federal regulations, maintain liability protection, maintain accurate financial records, and attract customers to your business
ACCOUNTINGANDREFUNDS.COM |
(678) 218-6433 | STONE MOUNTAIN, GA