The skinny on LLC's

It appears I need to "file articles of LLC formation or articles of organization with the state government agency in charge of corporations and limited liability companies" with Maryland's secretary of state office's "Corporation Division" or "Corporations Division."

Teh same web site strongly suggested an "Operating Agreement" which describes how the LLCs owners, or members, relate to each other and to the LLC. That'll be pretty easy: ME.

And confirming the reason behind making an LLC:
"With an LLC as the business owner, so says my attorney friend, the "worst case scenario" is liquidation of the LLC and the people who own the LLC lose what they’ve invested in the LLC.

Without an LLC, the business owner’s "worst case scenario" if there’s a "slip and fall" accident is that the owner can lose almost everything they own. In other words, the business owners could lose not only their investment in the business but many other assets as well.

An LLC may need to print new letterhead, business cards, and envelopes that use the new LLC’s name in order to show the world that you’re now operating as a limited liability company. (Not a problem since I have none of these made for First Stop Tech yet.)

Finally, an LLC can save the owners thousands of dollars a year in income or payroll taxes.

As to why one sets up C and S corporations:
"A C corporation, for example, often lets businesses provide rich tax-free fringe benefits to employees including shareholder-employees. And an S corporation often lets a business dramatically reduce the self-employment, social security and Medicare taxes paid on the owner’s profits"

Something to keep in mind if the company someday makes more money than I know what to do with.

Why wouldn’t every business use an LLC or limited liability company?"

Perhaps predictably, there are some costs and headaches associated with operating as an LLC. While the bank account for a sole proprietorship may be free, a limited liability company probably won’t be. The bank may charge $10, $20, or more each month.

An LLC probably needs to file its own tax return if the LLC operates as a partnership, a C corporation or an S corporation. (Not applicable to me, a sole proprietor and filing as such)



Okay, I'm sold.
Let's get it done.

Google "Maryland LLC application....Bang!":
http://www.dat.state.md.us/sdatweb/sdatforms.html




Sources:
http://www.buzzle.com/editorials/12-23-2005-84744.asp
http://www.buzzle.com/editorials/12-23-2005-84745.asp