Limited Liability Company (LLC) Arizona is similar to incorporation. The basic difference is that incorporation involves establishing the legal structure of the business and limited liability company involves only the management of the business affairs. Like incorporation, an LLC can be both domestic and international. An international LLC is managed by a board of directors beyond the resident business's employment location. Business owners may still choose to incorporate their LLCs.
Limited Liability Company (LLC) Arizona allows business owners to separate their legal responsibilities and liabilities from their businesses. For instance, unlike corporation commission, owners of an LLC are not liable for debts of the business even if they are named as the owners of the business. An owner can also control the transfer of shares of stock in an LLC. All these features make the formation of an LLC a popular option among small business owners.
However, before you avail the services of any llc arizona service provider, you should carefully consider certain factors to ensure that you get the best results out of the limited liability company. Filing for an Arizona Limited Liability Company is not a difficult process, provided that you know how to go about it. To begin with, you should contact your state corporation commission. You can file for an Arizona Limited Liability Company through them directly or via the United States Department of Commerce. Upon approval of the filing, you will receive a Certificate of Organization.
Creating an LLC in Arizona
After getting the certificate, you can now look at the different options available to set up an LLC. If you are planning on incorporating a limited liability company, you will have to choose one of the two following options-either a Domestic or a Multi-Member LLC. Domestic limited liability companies are designed to be operated by one person. On the other hand, multi-member LLCs are similar to corporations, but their memberships are unlimited. In this case, you do not necessarily have to select a specific number of members for the LLC.
Limited Liability Company (LLC) provides many benefits over sole proprietorships and corporations. An LLC is both more convenient and less costly than most other options available. This is because an LLC eliminates the need for paperwork and filing fees, and it eliminates the liability for damages incurred by the partners. Aside from these two major benefits, there are still many other advantages associated with an LLC such as:
- Limited Liability. Like a sole proprietorship, an LLC does not need to pay corporate income taxes until it becomes publicly traded. It also doesn't need to pay the double taxation of operating its business by government tax codes and paying the corporate income tax at the same time. You may elect to have the business treated as a C corporation instead, which will allow you to be treated as if your business is privately owned rather than a public corporation.
- Taxation. Unlike a sole proprietorship, an LLC does not have to pay corporate taxes. Instead, it is taxed only on the individuals' personal income tax rate. Because an LLC is not publicly traded, you don't need to report it separately with the IRS as you do with a C corporation.
- No double taxation. Unlike a sole proprietorship, an LLC will not be taxed on the profits. Instead, the profits are passed down between the partners through distribution in the form of dividends. A sole proprietor is not exempt from paying taxes; however, he or she may choose to pass the tax on to the beneficiaries. Although you cannot choose to bypass the IRS when creating an LLC, you can report it when you begin to earn taxable income.
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