Things You Need to Do After Forming an LLC
If you recently established a Limited Liability Company (LLC), you have been taken an essential step regarding the legal foundation for your business and preserving your personal assets. Publishing LLC includes several benefits, such as flexible management structure, protected assets, heightened credibility, and pass-through taxation.
But creating an LLC is not enough to legally open your doors for business; you have to consider few things after forming an LLC.
Obtain necessary business permits and licenses
A business license gives you the authority to operate. Rely on the kind of business you run and where you live, you need to get a business license from your country, state, or town. The permits and licenses include permit from the health department, zoning permit, professional licenses, home occupation permits, and business operation license. Most of them are comparatively inexpensive and obtaining one straightforward will save your money and keep your company authorized.
Get a seller’s permit
The requirement to hold a seller’s permit applies to partnerships, corporations, and limited liability companies that sell taxable services and goods. You can apply online using electronic registration (eReg) or you may visit at a nearby Board of Equalization (BOE) office. Make sure you obtain this permit before you start selling.
Federal tax identification number
A federal tax identification number, also known as Employer identification number (EIN), is a way by which IRS identifies your company and tracks its transactions. If your company owns employees, EIN is mandatory. It’s recommended to get an EIN even without employees so that it protects your personal social security number from your vendors and clients.
Apply for S Corporation S Treatment
An LLC has pass-through tax treatment which means that the profits and losses of business have to be passed along and reported on the owner’s tax return. LLC owners should report all profits and losses of their business on a Schedule C with their personal tax return.
However, to elect S Corporation status may benefit you to some extent; it enables you to break the business’ profits into distributions and salary. For this, you need to file form 2553 with the IRS within 75 days from the start of the current tax year or 75 days since publishing LLC.
Open a secure business bank account
After establishing the LLC successfully, you can open a business bank account under the LLC. It enables you to accept checks which are made out to your business name. A dedicated business account also keeps the personal and business finances separated.
Insure your business
Forming an LLC protects your personal assets from any liability of the company but it doesn’t guard the business itself from losses. Because of this, it’s recommended to get liability insurance or a Business Owners Policy. It will generally cover the business against injuries, accidents, and negligence claims.
Get a Doing Business As (DBA)
You need to file a DBA for the variation under which your company will be operated. To operate underneath the LLC, you should have your LLC file the DBAs.
Plan your LLC complaint
Once you established your LLC, plan the steps to file company’s annual report or quarterly tax payments. You can also sign up for a service which automatically sends you notifications of federal filling and key state deadlines.