The term “business entity” describes any organization formed to conduct business. Most businesses operate under one of four primary business structures: sole proprietorships, partnerships, corporations or limited liability companies (LLCs). At RLTY, we almost always recommend setting up an LLC when you are just getting started.
Forming an LLC not only legalizes the business, but also creates separation and protection from your personal life. The LLC separates and protects you and all of your personal assets from any type of liability associated with the business. In simplest terms, you can’t be sued personally for something that happens with the business. Forming an LLC also opens the door to more than 250 tax deductions and allows you to write-off any investments made for the business. This means you have the potential to save THOUSANDS in taxes and keep more of the hard-earned money you make!
We don’t recommend it. A correct LLC setup should include an operating agreement, which we recommend be drafted by a legal team that understands entity creation. The operating agreement is the legal structure of the LLC and should be drafted specifically for your business and industry. The operating agreement is also how you obtain your legal tax status. This is important because not all industries are taxed the same.
Our team will handle all LLC setup, draft an operating agreement and ensure your business is structured the correct way without charging you attorney fees! In addition, RLTY offers lifelong email and phone support for your LLC.
When setting up an LLC, you must designate a physical headquarters for the business. RLTY always recommends using one of our partners’ registered agent address in your state for the sake of privacy, rather than your home address. You can still receive mail, bank/credit card statements, vehicle registration and other utilities at your home. This is just the address listed on the public record.
When it comes to choosing an entity for your business, we recommend a Limited Liability Company (LLC). An LLC is a hybrid entity that combines the limited liability of a corporation with the flexibility and tax advantages of a partnership. One of the key benefits of forming an LLC is that it provides personal liability protection to the owners. This means that the member’s personal assets are typically protected from any business debts or legal liabilities. From a tax perspective, LLCs are considered pass-through entities, which means the profits and losses of the business are passed through to the individual members, who report them on their personal tax returns.
An LLC is considered a better option than a sole proprietorship because it provides personal liability protection to its members, meaning their personal assets are protected from business-related debts and legal liabilities. In a sole proprietorship, the owner is personally responsible for all business debts and legal liabilities. Overall, an LLC can provide greater protection, flexibility, and tax advantages.
The legal requirements for forming an entity vary by state and depend on the type of entity being formed. In general, the process involves selecting a business name, filing formation documents with the state, obtaining necessary permits or licenses, and fulfilling other state-specific requirements.
It’s important to research and understand the specific requirements for forming an entity in your state.
The form an LLC, the specific documents required can vary depending on the state where it is being formed. It’s important to research and understand the requirements in your state. In general, the following documents are typically required: Articles of Organization (this is the document that establishes the LLC and provides basic information about the business, such as its name, address, and the names and addresses of its members or managers); Operating Agreement (an operating agreement is a critical document that outlines the ownership structure, management, and operations of the LLC); and Employer Identification Number (EIN) (an EIN is a unique identifier for tax purposes and is required for most LLCs that have employees or plan to hire employees. It is often required to open a business bank account).
Yes, it is possible for non-US citizens or non-residents to form an entity in the United States. However, the process and requirements may be different than for U.S. citizens and residents. It’s important to consult with an attorney or tax professional familiar with the process. RLTY can help international customers open an entity in the US.