Do Small Businesses Need LLC?
Forming an LLC is not required to start a small business, but in most cases, the benefits of starting an LLC are worth the minimal cost and effort. In this article, we’ll cover some advantages of starting an LLC and other popular business structures to help you decide on the best business structure for you.
Can you use your own name for an LLC?
Limited liability companies can use personal names in a variety of ways: first names, last names, initials plus a last name, or a personal name that’s only part of the business name, such as “Joe’s Bar and Grill.” You can also form an LLC under a different name and use your personal name as your DBA or “doing business …
What is the downside to an LLC?
Disadvantages of creating an LLC
States charge an initial formation fee. Many states also impose ongoing fees, such as annual report and/or franchise tax fees. Check with your Secretary of State’s office. Transferable ownership. Ownership in an LLC is often harder to transfer than with a corporation.
What if my LLC made no money?
Even if your LLC didn’t do any business last year, you may still have to file a federal tax return. … But even though an inactive LLC has no income or expenses for a year, it might still be required to file a federal income tax return. LLC tax filing requirements depend on the way the LLC is taxed.
Does my business name have to be the same as my LLC?
Cannot match an existing LLC name – Your LLC name must be unique to your company and cannot be the same as one already registered with your State. Cannot contain words for other business entity types such as DBA, incorporated or corporation – which would be misleading to consumers.
Does the name of your LLC matter?
California. You will need an original name for your LLC that is not used by another LLC in California. Conduct a California business entity name search to find out if another company is using your top business name choice before you register it.
How do I name my small business?
Read on for advice on how to name your business:
- 1) Take Your Time in the Beginning. …
- 2) Understand Your Business. …
- 3) Keep It Short and Simple. …
- 4) Be Descriptive. …
- 5) Share Your Business’s Story. …
- 6) Leave Your Name Out of It. …
- 7) Brainstorm & Use a Business Name Generator.
Why you should not get an LLC?
LLCs Can Complicate Investor Tax Situations
Members will be taxed on the LLC’s income even if no cash is distributed to you to pay the taxes; The investor’s ability to file its own tax return is dependent on receipt of the K-1, and if there are problems with the K-1, the investor could have to amend its tax return; and.
Why is an LLC bad?
Profits subject to social security and medicare taxes. In some circumstances, owners of an LLC may end up paying more taxes than owners of a corporation. Salaries and profits of an LLC are subject to self-employment taxes, currently equal to a combined 15.3%.
How do LLC owners get paid?
As the owner of a single-member LLC, you don’t get paid a salary or wages. Instead, you pay yourself by taking money out of the LLC’s profits as needed. That’s called an owner’s draw. You can simply write yourself a check or transfer the money from your LLC’s bank account to your personal bank account.