So you've grown your business and decided that you want to incorporate it. You've done your analysis on LLC vs sole proprietorship and decided it's a good idea to start a limited liability company (LLC).
How to create an LLC seems like a complex process that you definitely don't want to mess up. You probably have questions like “what legal documents do I need?”, “do I need an employer identification number?”, and “do I need to file an annual report?”
What is an LLC?Before getting into the nitty-gritty of how to create an LLC, it's important to first understand what exactly an LLC is. Put simply, an LLC is a business structure that gives you limited liability protection as well as pass-through taxation.
Some of the disadvantages of creating an LLC are:
Costs – Creating an LLC requires upfront costs which come in the form of a formation fee and filing fee.
Ownership – Transferring or altering ownership is much more restrictive in an LLC than in a corporation.