How to set up a legal business from a sellers permit to a LLC

You might be selling products from home and it might be going well without much legal hassle. But there comes a point when you may wish to become legit and file as a legal company. It is very natural to think of expanding your home business into an LLC.

There are many reasons to start a LLC, and starting a LLC has several benefits over a sellers permit. However, there are many online sellers who think that having a sellers grants them sufficientfreedom. It can be a fair deal for those who believe that it is a convenient option. In case you are not the one who feels that is enough and are holding back just because starting an LLC can be a "big deal" then this article will help you clear your doubts. So, let's get started:

Setting Up a LLC

The first thing that may scare you from taking your dream step is the legal process. Therefore, we would like to give you a clear picture about the step by step legal procedure to set up your own limited liability company. So, how do you do it? Until now, as a sole owner of your business you have had to file a Schedule C along with a Form 1040. As an LLC owner, you should file an additional business tax return. Now, let's look at the cons of having an LLC. It can mean that you need to pay a lot of money to your tax preparer. Also, if you live in any of those forty-one states that collect income tax then you will be filing twice the amount of returns annually. This may discourage you to a great extent.

Nevertheless, there are definitely reasons for having an LLC over a sole proprietorship. As an LLC owner, your personal assets will not be harmed in case of a fraud or lawsuit. You can keep your personal assets protected. But if you are under a sole proprietorship, then your assets can get snatched along with your business earnings as there is no differentiation.

After understanding one of the major benefits of having your own LLC, let's move to the other factors. An LLC is a stepping stone. Everything starts small and then grows bigger. An LLC is a balanced option between a home business and a full corporation. A LLC does not come with the hassles of a corporation. The best way to get started with your LLC is by visiting your state's website to find out what they do or do not require to give you the license.

Then, these are some recommended next steps:

* Get an abbreviated name for your LLC. This can be done through the Secretary of the State's office.

* Make sure you select an original name and not a duplicate one. Submit the articles of your soon to-be LLC to the Secretary of the State's office. It should include the name, business purpose, address, and names of every member LLC. Submit other relevant details as well.

* Include an operating agreement. This agreement should contain the basic structure of your business.

* Publish a legal notice of your Limited Liability Company in a printed journal or newspaper.

So, we hope that we have eased your tension and calmed your nerves about moving from a home business with a sellers permit to your very own LLC. Good luck with the process!