Forming an LLC, Part 1


The next few posts will be a series of articles about forming an LLC. I recently formed one for my graphic/web design business and at least for me, it was pretty complicated to understand everything. There are a lot of forms to fill out, legal actions to take, and certificates to get published. If you’re new to this it can all be pretty overwhelming, but it shouldn’t be. Over the next few days I’m going to go over,

- Different types of business entities

-The pros and cons of forming an LLC

- How to start the process

- Completing the publication requirement

- Maintaining your newly formed company

Note that I will be discussing the guidelines for forming an LLC in New York State. Each state’s requirements will be slightly different so make sure to research the necessary steps to take for your own state.

Choosing the right type of company for your small business is a very important initial decision to make. Before I go into why selecting an LLC was the best choice for my business, I wanted to list the different types of business entities there are and what each entails.  The information below was found on

C Corporations: A C Corporation is the most common type of corporation in the United States. When you form a C Corporation, the business owners create a separate legal structure that helps to shield their personal assets from judgments against the company. This structure includes shareholder, officers, and directors. (click for source)

Some advantages of forming a C Corporation include:

- The corporation will still exist even if the owner leaves the company

- Limited liability to all employees, shareholders etc.

- More credibility

- Unlimited number of shareholders (although if you reach 500 shareholders you’ll have to register with the SEC)

- Certain tax deductible business expenses.

LLC: Stands for Limited Liability Company. LLC’s offer protection for your personal assets in the event of a judgement against your business. The actual business isn’t responsible for taxes on profits. Instead, the owners report their portion of the business profits on their own personal tax returns. (click for source)  The structure of an LLC is more relaxed than a Corporation, for instance, no annual meetings are required.

Some advantages of forming an LLC include:

- There isn’t any residency requirement. The owners of the LLC don’t need to be United States citizens or permanent residents.

- There is no need for you to file a corporate tax return. As mentioned above, the owners share their profit and loss on their personal tax returns.

-Protection. The owners of the company have limited liability for business debts.

- More credibility as a business.

Since I’m the only employee of my company I decided that an LLC was the right option for me. Even if in the future I end up hiring one or two others, I still plan on maintaining a small business. If you’re planning on forming a large business with lots of people working under you, then looking into forming a C Corporation would be more appropriate.

C Corporations and LLC’s are the most common types of companies in the United States. However, there are other types of business entities such as Partnerships, S Corporations, and Sole Proprietorships. For more information visit

Tomorrows post will cover the pros and cons of forming an LLC and if it is a necessary step to take for your own business.

Related Posts

Add a Facebook Comment


  1. Useful information!

  2. Great information here. =0)

    • Thanks Kim! I really need to learn more about LLC’s and incorporating so writing blog posts forces me to do my research!

Speak Your Mind



Get every new post delivered to your Inbox

Join other followers