Foreign Entity Formation

If you begin operating as a business by yourself or with someone else you will be considered a sole proprietor or a partnership unless you specifically file for an LLC. However this can leave your personal assets vulnerable and for that reason we recommend forming an LLC.

One of the benefits of forming an LLC is that member assets are separated from that of the business. So if there’s a lawsuit, the LLC would be sued, not the members or owners. If the LLC is unable to pay the fees, other company-owned assets may be used to help pay down the debt.

Business asset protection helps protect the assets of the members, meaning the only thing the members own that’s at risk is the monetary investment they made in the company or any retained earnings.

If you are an owner of an LLC, you are referred to as a member, and LLCs can have anywhere from one to several thousand members.

LLC owners pay themselves through “draws” or “distributions,” rather than paychecks. These types of payments don’t have income taxes withheld, so you’ll be responsible for reporting your share of profits on your tax returns.

LLCs can be taxed differently depending on whether they are sole proprietorships or have multiple members, and whether or not you elect to be taxed as a corporation. You can speak with your accountant for more information. LLCs can be taxed differently depending on whether they are sole proprietorships or have multiple members, and whether or not you elect to be taxed as a corporation. You can speak with your accountant for more information.

Yes, you can form your own limited liability company, provided you follow all of your state’s applicable laws.

However, using our business formation service makes LLCs easy and inexpensive to form. Our business formation experts do the work for you and are there to answer your questions, every step of the way.

Both LLCs and corporations protect owners’ personal assets from business liabilities or debts. But they have some key differences, including:

• How they’re owned - LLCs have one or more individual members, but corporations have shareholders.
• How they’re maintained - LLCs generally have less formal record-keeping and reporting requirements.
• How they’re taxed - LLC profits usually pass through to members before taxes, while profits for some corporations are taxed at the company level first.

Personal liability protection. An LLC protects owners from being personally on the hook for business liabilities or debts. A sole proprietorship doesn't.

LLCs, corporations, and nonprofits. You don't get personal liability protection with sole proprietorships or DBAs.

A foreign qualification is the process that allows an LLC (or other business entity) formed in one state to legally operate in a different state. Think of it as getting permission from each new state you want to do business in.

A business needs to get a foreign qualification if they want to expand their operations beyond their original state of formation. This is necessary when they have a consistent presence in another state, such as:

• Having a physical location (office, warehouse, etc.)
• Employees working in the other state
• Significant sales or business activities in the other state

If a business operates without the proper foreign qualification, they could face several consequences, including:

• Fines and penalties
• Back taxes
• Restrictions on doing business in that state
• Inability to enforce contracts in the state's courts

The process typically includes:

• Filing specific forms with the Secretary of State or other relevant agency in the new state.
• Paying required filing fees.
• Appointing a registered agent in the new state (a person or business authorized to receive legal documents on behalf of your business).