Frequently Asked Questions on Corporate & Business Law

What is an LLC? LLC stands for a Limited Liability Company, and it is a legal form of a company that provides limited liability to its owners.

How do I form an LLC? First, you have to reserve a name with the secretary of state. Then, you will need to create a certificate of formation and file it with the Probate Court and Secretary of State.

Will an LLC protect me from a lawsuit? It can shield you from some liability; however, there are certain situations in which the LLC’s owners or members could still be liable.

Will an LLC protect my assets? It will not protect the assets in the LLC; however, it can protect your personal assets from debts or liabilities of the LLC.

Can an LLC own property? Yes, an LLC can purchase property in its name.

Where do I file an LLC? In the probate court in the county where the LLC was formed, and with the secretary of state.

Which is better, an LLC or a corporation? It depends on the situation and the business being created.

How is an LLC taxed? It can pay income tax like a partnership or a corporation.

How do I pay myself if I am a member of an LLC? There are various ways that a member of an LLC can receive distributions from an LLC.

What is a sole proprietorship? A business owned by one individual.

Can a sole proprietorship have employees? Yes, they can.

Does a sole proprietorship need a business license? Yes, typically they will need a business license if they are doing business in a municipality or other taxing jurisdiction.

Can a sole proprietorship change to a partnership? Yes, it can.

Where do I register a sole proprietorship? Sole proprietorships aren’t registered like corporations or LLCs, but they may own intellectual property like trademarks, service marks, copyrights, or patents for which a filing my give greater protection.

How are sole proprietorships taxed? It does not generally pay income tax separate from the owner.

How is a sole proprietorship governed? By the owner.

How do I form an S corporation? By filing a Certificate of Formation with the Probate Court and Secretary of State.

Where do I file an S corporation? In the Probate Court in the county where the Corporation was formed, and with the Secretary of State.

How is an S corporation taxed? It generally does not pay income taxes separate and apart from its shareholders.

What is a C corporation? It is a traditional Corporation with shareholders.

How do I form a C corporation? By filing a Certificate of Formation with the Probate Court and Secretary of State.

Where do I file a C corporation? In the Probate Court in the county where the Corporation was formed, and with the Secretary of State.

How is a C corporation taxed? It generally pays income taxes separately from its shareholders.

If you have questions on a corporate or businss law matter, contact an experienced business lawyer or corporate attorney at Malone & Nelson today.