LLC Formation: Who Qualifies and What You Get
Learn how forming an LLC can separate your personal assets from your business liabilities to protect your livelihood.
An LLC is a legal structure that allows you to establish a business entity separate from yourself.
Who it's for
This is for creators and individuals looking to limit their personal liability. It is a common choice for those who want to protect their private assets from business-related legal or financial issues.
What you get
By forming an LLC, you gain legal separation between your personal assets and your business liabilities. This means that, in many cases, your personal property is shielded from the debts or legal obligations of the business.
What it costs you
The cost varies depending on which state you are in. To set this up, you will need to file official Articles of Organization and you should expect to pay annual fees to keep the entity active.
The catch to know
The most common mistake is failing to maintain a "corporate veil." This happens if you mix your personal money with your business money. To keep your legal protections, you must treat your business finances as entirely separate from your own.
How to apply
- Choose a unique name for your business.
- File your Articles of Organization with your state's official office.
- Follow your state's rules for maintaining your business status through annual filings and fees.