Which States Do Not Recognize LLC?

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Which states do not recognize LLC?
Several states have followed suit including Illinois, Iowa, Nevada, Oklahoma, Tennessee, Texas, Utah and Puerto Rico. Some states, like California, do not allow for series LLCs to be formed under state law but series LLCs formed in other states can register with the state and do business in the state.
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Limited Liability Companies, or LLCs, are a common corporate form for small business owners in the US. This type of business form combines the adaptability of a partnership with the limited liability safeguards of a corporation. But not all states accept LLCs. This article will cover topics such as which states do not recognize LLCs, which states permit series LLCs, if you need a lawyer to form an LLC, whether an LLC needs to generate revenue, and the advantages and disadvantages of an LLC. In which States Is An LLC Not Recognized?

The good news is that, with the exception of the following states, every state in the US recognizes LLCs: Massachusetts is first, followed by Mississippi, New Hampshire, North Dakota, and Tennessee.

However, there can be limitations or additional requirements for LLCs in some states. Before forming an LLC, it’s crucial to consult the state’s secretary of state or an experienced lawyer. In which States Can a Series LLC Be Created? A series LLC is a special kind of LLC that enables the formation of various series under a single parent LLC. There may be several series under the parent LLC, each having its own members, liabilities, and assets. The following states recognize series LLCs: Delaware, Illinois, Iowa, Nevada, Oklahoma, Tennessee, Texas, and Utah are the first three on the list. Do I Need an Attorney to Form an LLC? No, a lawyer is not required to form an LLC. To make sure you are adhering to all legal requirements, it is advised that you speak with a skilled attorney. You can also get assistance from a lawyer to properly prepare and submit the required paperwork to the state. Does an LLC Need to Be Profitable?

No, an LLC is not required to turn a profit, but it is typically created with the intention of doing so. Additionally, a non-profit entity, such as a charity or social group, may establish an LLC. However, if an LLC repeatedly experiences a loss, the IRS may become concerned and classify the LLC as a hobby rather than a business.

What are an LLC’s benefits and drawbacks? There are no residency or citizenship requirements for owners.

Pros:

Limited liability protection for the owners

Flexible management structure

Pass-through taxation

Cons:

Annual fees and filing requirements

Self-employment taxes for owners

Limited life span

May be subject to state-specific regulations and requirements

In conclusion, LLCs are a well-liked form of corporate formation among US small business owners. Even though LLCs are recognized by the majority of states, it is crucial to consult an experienced attorney or the state’s secretary of state before forming an LLC. Some states recognize a special kind of LLC called a series LLC. Although it is not necessary to hire a lawyer to form an LLC, doing so is advised to guarantee that all legal criteria are met. Although an LLC is typically created for profit, it is not required to produce money. Finally, even though creating an LLC has advantages and disadvantages, many small business owners choose to do so.

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