LLC: What You Need to Know About Starting a Limited Liability Company along with Tips for Dealing with Bookkeeping, Accounting, and Taxes as a Small Business

By Robert McCarthy

If you are thinking about starting an LLC and want to learn everything there is to know about how to form and run a Limited Liability Company in a simple and effective way, then keep reading…

One big mistake people make when starting a business is to begin without actual knowledge of how the process works. This book answers your small-business questions with a step-by-step approach that will quick start your business.

It shows you the steps to the fast and easy way of forming a Limited Liability Company—and helps you discover the essentials of how to operate it successfully.

Most people are familiar with the various business structures, but, often, their knowledge of each rarely goes beyond the surface of learning the basics. From knowing how to permanently lower your taxes to accounting made simple this book is an essential piece of your small business start-up kit.

Are you an independent contractor or sole proprietor?

Which business structure should you use to build wealth and keep tax deductions for your business to a minimum?

Should you form a Limited Liability Company?

What are the potential benefits of forming an LLC?

These are questions that you need to find answers to in order to discover if the LLC business structure would work best for your business.

In three highly insightful sections, we carefully break down the entire process of forming an LLC from scratch and running a fully IRS-compliant Limited Liability Company.

Besides taking you through the easy route of creating an LLC, this book will also show you the most important things you should know about a Limited Liability Company.

Here is just a tiny fraction of what you will discover:
- How to set up and run an LLC
- The difference between an S-Corp and C-Corp – and, should you have one?
- How to set up your business to reduce your tax burden
- Tips on how to name your business
- How to set up the required Articles of Organization
- How to create financial statements for your Limited Liability Company
- How to set up payroll and how to pay yourself as the owner of a Limited Liability Company.
- Basic accounting solutions.

These and many more remarkable secrets for forming and operating your business successfully are explained in this book in plain and simple language. No needless business jargon, just facts!

Achieve your entrepreneurial dream and turn your vision into reality! Get the book now to learn how to set up your company, reduce your business taxes, and protect your assets!

• Language: English
• Publisher: Robert McCarthy
• Release date: Mar 9, 2021
• ISBN: 9781393106586

Book preview

© Copyright 2020

All Rights Reserved. No part of this book may be reproduced in any form without permission in writing from the author. Reviewers may quote brief passages in reviews.

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While all attempts have been made to verify the information provided in this publication, neither the author nor the publisher assumes any responsibility for errors, omissions or contrary interpretations of the subject matter herein.

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Introduction

If you are one of the many highly motivated individuals who are looking to achieve the American dream by owning a business, forming a Limited Liability Company can be a great way to organize your company. This form of business structure has become one of the most popular in the U.S. because of its many advantages.

An LLC requires fewer formalities to start, protects you and your personal assets, and above all, offers tax flexibility. But don't take my word for it just yet. I will begin this book with an overview of the various business structures available to you and go over the main reasons an LLC is perhaps the best option. Whether you are just starting out as an entrepreneur or you have your own company established already, this book will help you understand why an LLC business may be the best option for you.

This book is divided into three sections for easy understanding and clarity. Part one contains in-depth information about the essentials of what a Limited Liability Company is and the various forms of LLC business structures available.

In part two, we zoom in on the process of forming a Limited Liability Company. If you are won over already on the idea of establishing your business as an LLC, this chapter contains a handy guide that takes you through the process. It will highlight the process of starting an LLC from scratch or converting an already-existing business to a Limited Liability Company. Part two also contains information about basic LLC formation processes, such as choosing the right name for your business, creating the articles of organization, and the LLC operating agreement, which is a vital document that establishes your business as an LLC.

This book is an A to Z guide on forming and running your own Limited Liability Company. Part three covers in detail the various processes involved in the day to day running of a Limited Liability Company. You will find information about how to do accounting for your LLC, preparing financial statements, and doing taxes for an LLC.

All the information contained in this book is designed to help you to build a Limited Liability Company that thrives and complies with all the regulations and standards. So whether your mind is already made up to start a Limited Liability Company or you still need some convincing, follow along as I show you, step-by-step, how easy creating your own Limited Liability Company can be.

PART ONE: LLC Business Essentials

Chapter One: What is an LLC?

For anyone planning to start a business, one of the major decisions they face is deciding on its organizational structure. This decision is important because the business structure will determine the income, liability implications, tax accounting, and other important details pertaining to the business.

Types of Business Structures

In the United States, there are four major business structures. They are sole proprietorship, partnership, corporation, and limited liability. We start by explaining each of these business structures as a simple guide to prospective business owners.

Sole Proprietorship

Most businesses that have just one owner typically start as a sole proprietorship. Many become nothing else. But many sole proprietorships grow and eventually become organized into other forms of business structures. Starting a business as a sole proprietor is a relatively simple process. You need not have any official government paper or have your company registered with the IRS. This is because a sole proprietorship isn't a taxable business entity. People who own a sole proprietorship simply need to add a profit and loss from business form (Schedule C form) to their personal tax returns, and they have things covered.

A sole proprietorship has the simplest business organization structure possible. This business structure gives total control of the company operations to the owner. Usually, they are home-based companies, small shops, one-person consulting firms, or simple retail businesses. A sole proprietor is responsible for the day to day running of the business. He or she handles activities like record-keeping, doing taxes (self-employment taxes), and decision making. This form of business structure provides no protection for the business owner. He or she is held liable for the company's financial obligations and debt.

Partnership

Any business started and ran by one or more persons is considered a partnership by the IRS. With a partnership, each person (partner) is considered equally liable. For businesses with more than one owner, a partnership is the most flexible structure you can go for.

Like sole proprietorships, partnerships are not taxable entities. Rather, each partner has to file his or her own income on their personal tax return and pay self-employment tax to the IRS. The partners also share joint liability. This means they are responsible for debts, financial obligations, and even for the actions of their partners in terms of the business. Partnerships can be formed simply through oral agreement and handshakes. However, a written legal agreement is the best option, as this will be helpful with lawsuits and disputes between partners.

Partnerships can be structured in two ways, either as a general partnership or limited partnership. In general partnerships, all partners pool their resources together to form the business, and they all participate in running the business. With limited partnerships, not all the partners participate in running the business. One partner actively takes control of business activities while the other(s) is or are only partners because of their financial contribution to the company.

Corporations

Corporations are businesses that operate as separate legal entities from their owners. Hence, the owners are protected from claims filed against the activities of the company or debts. However, the obligations of incorporating a company are enormous and significant resources will be required to pay for legal and accounting activities.

A corporation is the most complex form of organizational structure for any business. Typically, corporations are regulated by the laws of the state where they are set up. Unlike partnerships and a sole proprietorship, they are taxed as separate entities from the owner(s) by the IRS.

Corporations can be structured in two ways, either as S-corporations or C-corporations. This categorization is based on the way the corporations are organized in terms of taxation.

● S Corporation: Subchapter S corporations have less than 100 shareholders. They function more like partnerships because the income and loss of the company may be passed on to the shareholders to avoid paying federal taxes. However, the owners of the business have legal protection and are immune from corporate liabilities.

● Subchapter C Corporation: Ordinary corporations are regarded as subchapter C corporations. They are considered separate legal entities, and the tax returns are filed separately from shareholders. Because a C-corporation is a legal entity, in court it is treated more or less like a person.

Limited Liability Company (LLC)

A Limited Liability Company is a relatively new form of business structure. It falls somewhere in-between all the other business structures. It is organized in the form of a  sole proprietorship or partnership but offers a level of legal protection similar to that of a corporation.

In most states, owners (members) of an LLC get legal protection from liability or lawsuits. They are not required to pay corporate taxes (unless they elect to do so) or go through every registration requirement of a corporation. They are essentially treated as sole proprietorship or partnership business unless they specifically request to be taxed as a corporation.

What is a Limited Liability Company?

Although it is the newest form of business structure, limited liability companies have become

Reviews for LLC

[Scotty Voltaire · Rating: 5 out of 5 stars]

Very nice overview of the LLC pros and cons, as well as comparison to a corporation type set up. This book was really well written and explained everything in an easy to digest manner. Seriously worth a read if you are entering into an LLC. Highly recommended!!

[Lancy Lass · Rating: 5 out of 5 stars]

This book clears the confusion regarding LLCs and assists you in determining which entity is best for your needs. Its terminology and explanations are easy enough for a beginner to understand, while seasoned readers can appreciate a concise review of the basics. The value of the information in this LLC book astounded me!

[Daisy Regala-Ando · Rating: 5 out of 5 stars]

For those into business or plan to do business then this book can be your guidelines in starting a business. In managing business the very important thing to consider is MONEY, it's all about that so you must secure it and knows how to properly handle it. This book has it all. It gives you knowledge enough to be confident in handling the business. Very informative book for the beginner.

[Julius Brigades · Rating: 5 out of 5 stars]

This book is a great way to understand many potential pitfalls of diving into an LLC. It does come down to due diligence and long term goals. I enjoyed the perspective. Definitely a very good one for those in corporate or starting your business.

[Niebby Barez · Rating: 5 out of 5 stars]

I know only a little about business and I am glad to have read this book. All along I thought that the necessary aspect to ensure a success for business is knowing the target market, location, and having your business niche. However, though I am familiar with the other structures of business, this one helped me understand another structure which is the LLC. This is such a refreshing topic and I think that those who wants to start their business should read this one. Truly the book met what it promised! It is, indeed, in-depth and provides clarity about the important matters of business from basic business operations, taxes, and down to payrolls. I guarantee that if you want to start from scratch or convert your business to LLC, this book is the best guide for you! This book has also an info about how to establish a business so it just perfect.

Happy to give this book a five stars!

[Anne Watson · Rating: 5 out of 5 stars]

Most people, especially those aspiring entrepreneurs or businesswomen/businessmen, may be familiar with the different methods and structures that the business world is offering. But how far could this knowledge go, especially when you are about to bang a headstart in building your own company? How independent could you be in terms of aspiring to craft a company on your own?

Those kinds of questions shouldn't be your limit. And this book will tell you why the questions aforementioned above should not scare you but rather marginalize you to push your limits. McCarthy, the author of one of the finest books in teaching business, is able to discuss within three highly insightful sections, the breaking down of the entire process of building an LLC from crumpled scratch and running it smoothly. The author also offers different methods and strategies that would make us believe that building something remarkable shouldn't scare the hell out of us.

[Romelyn Castro · Rating: 5 out of 5 stars]

This book is an excellent guide that has an orderly way of explaining things regarding business. I am familiar with some terms indicated but some are too technical but what's good about this book is that, it was well explained that are easy to understand. Thus, the author is not biased regarding LLC since he included the advantages and disadvantages of LLC. Good work, Author!

[Revi James · Rating: 5 out of 5 stars]

In my experience, it's a great guide for describing LLC. It's also useful in that it covers topics like how to start a business. It contains a wide range of technical detail, but it is understandable even to those who are not especially well-versed in business.

[Laijho Marapao · Rating: 4 out of 5 stars]

Adopting U.S' specific form of private company is a great idea. You can apply its structure if you're planning to begin your own business or even if you already have your own, still this one is applicable.
This book will surely help you with that matter as it tackles about the three important sections of limited liability company. Also, it discusses about bookkeeping, accounting, and taxes matter. Almost everything you need to know are here. This is a reliable basis and many businesses are currently applying this kind of structure. This is the perfect guide for you, with this, your journey in putting up your own business will be successful.

[Rosendo Villarmea · Rating: 5 out of 5 stars]

Informative book who wanted to start a business. It teaches us the basic knowledge needed to apply if we are going to enter into any type of businesses.

[Jefferson Baniqued De Guzman · Rating: 4 out of 5 stars]

This book will teach you the concepts of book keeping, accounting and tax. Its a good guide in understanding your responsibilities as a citizen. This is an advisable materials for accounting students for them to understand basic principles of accounting.

[Karl Angelo Gil · Rating: 4 out of 5 stars]

Love the book straight to the point and a quick concise read! Recommend that all future entrepreneurs read this first

[Ella Perdigones Carilla · Rating: 5 out of 5 stars]

For anyone who aspires to venture a business, here's a book for you!

Business world is indeed a risky journey to take. You need to educate yourself for you to be able to run a good business. Good thing, this book got your back. It will introduce you to Limited Liable Company (LLC) which encompasses many essential information that can be a tool in building LLC of your own. I myself learned the processes in establishing LLC. It's good that this book really covers every detail you need to know— from small to bigger ones. This book will also teach you how to prepare financial statements, doing taxes and accounting for your LLC. Thus, even LLC is a complex thing to explain especially for first time readers, they still got everything contained in the book and put each into details so, it would not be hard to comprehend. The reason why this book, in my opinion, is best for aspiring business persons to read.

[Marnie Bentulan · Rating: 5 out of 5 stars]

This book is very helpful to my family now that we have started doing small business. It gives us more insights on how to reduce our tax burden and gives us ideas on how to solve basic accounting problems. What I love this book is that, it is explained in simple words that can be understood easily by the readers who wanted to start or has started already their own business.

[Linda Zapata · Rating: 4 out of 5 stars]

Venturing out to the business world requires a lot of courage because it is risky if you'd go in blind. You must know what is the best business structure that is most suited to the business you are planning. This book introduced me to LLC or Limited Liability Company. True to it's name, what is best for all budding entrepeneurs are a company that has little to no liabilities to achieve higher income returns. I also learned that there are different kinds of LLC's. Although this type of business structure has its disadvantages what matters most is how you handle it. This book also focused on that note. I may not be a business person but what I learned from this book will come in handy if I decided to have one.

For the most parts of the book, I liked how organized the topics are. You can easily navigate it and not get lost from one topic to another. And the good thing of having an LLC is because it's simple process. A big thank you to the writer who gave his effort in simplifying the process and different complex terms with regards to LLC.

[Troiii · Rating: 5 out of 5 stars]

The term Limited Liability Company (LLC) is new to me, that's why, before reading this book, I'm having doubts that I might not understand the other new terms that's surely waiting inside the book. But I'm wrong! The book simplifies all the complex terms it can, or gives explanations so readers can fully grasp the topic. I like how the book is divided into parts, each focusing on one goal. It tells you all the things you need to know about forming a business and the steps you need to take for you to succeed. There are also discussions about the advantages and disadvantages and why LLC is a better choice when it comes to starting a business.

[Ian E. Daguplo · Rating: 4 out of 5 stars]

Bravo! Salute to Robert for making this craft. It was helpful on how to make your business dream into reality and success.
What I really love on this book was giving insights from very specific problem and turning solutions. It gives basic solutions on accounting problem. A helpful tips that business minded could relate to and can apply it to their work.

I find it interesting since I had plan to put some business. With these tips and knowledge, I will be guided on making my own strategy.

[Ross Mari Galleto · Rating: 5 out of 5 stars]

I started doing online selling weeks ago with the vision of making a physical store someday to make it a formal business yet I'll admit that I have a very limited knowledge about business so I seriously learned a lot from reading LLC. Sole proprietorship, partnership, and corporations have been discussed repeatedly in economics subject in my college but I never heard about limited liability company. The introduction wherein every types of businesses are thoroughly explained was a great start. It will surely encourage you to go with LLC.I think it will be great to start one given that it has the liability protection of an incorporated company with the tax advantages of a sole proprietorship or partnership business. It is also easier to start and the tax responsibilities are very manageable. To sum it up, if you are about to start a business but is still confused on how and when to start one, I highly recommend this book for you to have a bigger vision of your future in the business world.

[Camille Manalese Gonzal · Rating: 4 out of 5 stars]

Starting up a business? LLC gives you the appropriate approach to handle your company, it may involve a lot of planning but it will take you to your heights of success.

This book is a great way to learn Liabilities as it also revolves around the income, accounting and tax of the business you are making.

Great book! I really recommend this.

[Lyra Jhoana Marapao · Rating: 5 out of 5 stars]

I dont really have any idea with regards to Limited Liability Company so this book really mean to me as it gives me deeper understanding with this matter. A very informative material which you can rely if your seeking for some tips in order to form your own LCC. This books shows information starting from scratch or converting, naming your company, even the creation of articles of your organization. All you need and want to know are all here! A very detailed material and is easy to understand. This book is suitable for any people who are dreaming to have their own business, this wil help you in making your dream a reality. You can get assurance from trusting LCC as it gives so much advantages, no wonder why LCC is considered as one of the most popular in U.S.

[Theodore Hurts · Rating: 5 out of 5 stars]

As an owner of as small business I find it helpful for my setting as I have plans of expanding this small business and considering entering on a partnership. I have an idea on how this thing should work and the future paperworks I need to prepare.

I highly appreciate the author on sharing the information with the people who doesn’t have any background in accounting.thanks.

-Theodore

[Hestia Selin · Rating: 5 out of 5 stars]

This is an excellent book for those interested in starting a partnership-style company without attempting to form one. In addition, forming a Limited Liability Company could be more appealing than forming a corporation since it is relatively easier. The author provided thorough information of how a LLC works and has included the advantages and disadvantages of starting this type of business. It covers the fundamentals of creating a LLC. It also explains when a LLC is the right option for your company, why hiring an attorney is an option to complete the process of the articles of an organization, and what documents are needed to make the LLC legal. Moreover, the accounting process as well as taxes for this type has also been discussed. This book is informative and a useful tool since it has provided knowledge that can help in achieving success in a Limited Liability Company.

[Myrchel Montesino · Rating: 5 out of 5 stars]

A limited liability when we talk about partnership or corporation means that a third person involved in the said firm cannot force the stockholder or partners to pay for the liability of the firm. Stockholder or partners are only liable to the extend of their capital contribution. These are the few things you will learn if you read this book.

Maybe you are wondering, why should I need this kind of knowledge? Well, I tell you, business is not as easy as it may seem it carries so much risk, I'm not saying that risk is a bad thing because actually, if we talk about business, the higher the risk; the higher the return, but what I am trying to point is that there are risks that are unnecessary that should be eliminated. Moreover, reading this book, LLC, will help you eliminate those risks and maximize your profit.

[Sara Jane del Rosario · Rating: 5 out of 5 stars]

This book will gives you information and full access that will help you have knowledge about LLC or Limited Liability Company. That will help you establish your own business.


All the information you want to know about LLC is in here, this book will guide you step by step in your way to have your own business.

You will also know, learn and understand the advantages and disadvantages of LLC compared to other business you have in mind. Will give the readers full knowledge and access that can be a help in the future if planning to have a business or a company.

The author is generous enough to gives his/her knowledge about this topic. And he delivered it easy to understand on the process. Good job and keep on writing!

[Ryan Intes Patigdas · Rating: 5 out of 5 stars]

Having a business is hard to established without exact knowledge, it's risky because you're dealing with your money and it's your future lies ahead. This book has a great information for those who are planning in establishing a business this helps you how to start, the great thing of this book it will teach you step by step process. By reading this book and learning from it, you gain enough knowledge in business industry and you feel secure of your money in the future.

Great book! Very useful and knowledgeable! Keep it up author.