Making a choice about the legal structure you wish to utilize is one of the first steps in starting a business. A corporation and a limited liability company (LLC) are two of the most popular choices. However, a lot of people mix up the two, which leads to them making expensive errors. The distinctions between articles of organization and LLC, as well as certain connected issues, will be covered in this article.
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You might be debating between an LLC and a S corporation (S corp) when choosing the legal form to utilize for your company. The decision ultimately comes down to your company’s demands, however both alternatives have advantages and disadvantages. An LLC typically requires fewer paperwork, is simpler to establish up, and offers more flexibility. An S corp, on the other hand, provides tax benefits and may be advantageous for companies with a large number of owners.
A registered agent is a person or business chosen by your LLC to receive official notices and other necessary correspondence. If you create an LLC, you are often required to have a registered agent. This is due to the fact that the registered agent’s address serves as the LLC’s registered address. Without a registered agent, you risk missing crucial legal notifications, which could result in penalties and fines.
Even while an LLC is often a fantastic choice for small enterprises, there are certain drawbacks to take into account. One of the greatest drawbacks of an LLC is that it is a pass-through organization, which means that the business’s gains and losses are transferred to the owners’ individual tax returns. The owners may have to pay more in taxes as a result of this. Additionally, if you intend to raise money from investors or take the business public, an LLC might not be the ideal choice.
In conclusion, an LLC and articles of organization are not the same. Articles of organization are the paperwork you submit to the state to establish an LLC, a type of legal structure that shields business owners from responsibility. It’s crucial to seek legal advice when determining what kind of legal framework to utilize for your company in order to make the best choice possible for your particular circumstances.
After the Articles of Organization are submitted to the Secretary of State in New Mexico, the formation of an LLC normally takes 10 to 15 business days. However, there is an extra charge for expedited processing. The processing time may change based on the workload of the Secretary of State’s office, it is crucial to mention.