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FAQ’s





LLC

  1. Can an LLC be owned by only one person?
    Yes, one person may own a limited liability company (LLC).  An owner of a limited liability company is referred to as a “member” of that limited liability company.


  2. Once I incorporate my company are other companies prohibited from using my company’s name?
    No.  It is still possible for another company to use your company’s name.  The best way to protect against someone else using your company’s name would be to get trademark protection of the name.  A and A Incorporating Services offers trademark services.


  3. Once I form an LLC will my personal assets always be protected? 
    No.  It is still possible for another company to use your company’s name.  The best way to protect against someone else using your company’s name would be to get trademark protection of the name.  A and A Incorporating Services offers trademark services.


  4. Are Minutes required for an LLC? 
    One of the benefits of a limited liability company is that you don’t have to follow the corporate formalities that are required of corporations, including the need to prepare minutes.  However, it often is advisable to prepare minutes even for limited liability companies so that you have a record of what matters were approved by the members of the company.


  5. What is an Operating Agreement (also known as an LLC Agreement)? 
    An Operating Agreement is one of the organizational documents that should be prepared for every limited liability company.  Operating Agreements typically set forth the relative rights, preferences and privileges of the members, the authority of the company’s manager, whether or not the company will have officers, etc.


  6. Does the Operating Agreement have to be filed anywhere?
    No. An Operating Agreement is an internal document.  It is not required to file an Operating Agreement with the Secretary of State or any other government agency in connection with the formation of the limited liability company.  Many banks, however, will ask to see a copy of your company’s Operating Agreement in order to open a bank account for the company.


  7. Which States have the best overall business tax climates?
    South Dakota, Nevada, Alaska, Florida, Montana, Texas, New Hampshire, Oregon and Delaware (according to “2009 State Business Tax Climate Index”, The Tax Foundation, October 2008, based on corporate tax rates, individual income tax rates, sales tax rates, unemployment insurance tax rates and property tax rates).

  8. Which States have the worst overall business tax climates?
    New Jersey, New York, California, Ohio, Rhode Island, Maryland, Iowa, Vermont, Nebraska, Minnesota (according to “2009 State Business Tax Climate Index”, The Tax Foundation, October 2008, based on corporate tax rates, individual income tax rates, sales tax rates, unemployment insurance tax rates and property tax rates).

  9. Which States have no personal income tax?
    Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington and Wyoming (according to “Business  Tax Index 2008”, Small Business & Entrepreneurship Council, April 2008).

  10. Which States have the highest personal income tax rates? 
    California, Vermont, Oregon, New Jersey, Maine, Washington D.C. and Hawaii (according to “Business Tax Index 2008”, Small Business & Entrepreneurship Council, April 2008).

  11. Why does every company need a Federal Employer Identification Number (EIN)?
    If you are going to operate a business or hold assets in a corporation, limited liability company, limited partnership or trust, then that corporation, limited liability company, limited partnership or trust will need an Employer Identification Number.  This is required in order for the company to file tax returns, open a bank account, apply for a business license and for a host of other purposes.


  12. I live in California.  Can I form my LLC in Nevada? 
    Yes.  You are not required to live in a particular State in order to incorporate a limited liability company in that State.


  13. What is a family limited liability company? 
    A family limited liability company is an LLC that is used to hold title to family assets (for example, real estate), a family business and/or investments.  All family members could be members (owner) of the limited liability company or the parents could be the initial members and, over time, gift limited liability company membership interests to their children (or other beneficiaries).  Family limited liability companies often are used to minimize estate taxes since membership interests typically can be transferred between generations (for example from parents to children) at lower tax rates than would apply if there were no limited liability company. For estate and gift tax purposes, the valuation of assets held in a family limited liability company may be discounted for valuation purposes and, therefore, less estate or gift tax may be incurred.