In the 200kfreelancer’s latest post on AARP’s Life Reimagined, we offered five questions to ask if you’re thinking of forming an LLC.
Most entrepreneurs form LLCs to protect themselves from liability. An LLC creates a separation between yourself and your business. That’s smart.
An LLC agreement. can also support collaborative decision-making, which is great if you have a partnership-style business. It doesn’t cost much to form an LLC, if you pick a low-cost state. Virginia, where I live, is one.
You can pay an online site like BizFilings a fee – often less than $50 in addition to the state’s fees – to help you with very basic formation documents. Before you pay even that amount, however, check with your state to see if you can file the papers yourself.
Here are the five questions we suggested asking:
1. Where will you form the LLC?
2. Do you need an attorney?
3. What will the tax implications be?
4. Do you want to form as a sole proprietorship instead?
5. Are you partners ready to sign an agreement?