Basics of an LLC
Posted on 2016-05-30 Edit on GitHub
Taking John Sonmez's advice on treating your career like a personal business, I have been researching LLCs and some basic information on setting them up.
1 What are LLCs?
LLCs, or limited-liability corporations, are basically legal entities that allow you to separate your business assets from your personal assets.
- With a sole proprietorship or partnership, you are personally responsible for any damages from lawsuits, etc.
- With an LLC, the most that can happen is that you'll lose your business assets–not your car, home, etc.
As with all businesses, LLCs have to be registered within a state. An LLC registered in a state is a domestic LLC in that state and a foreign LLC to other states. Foreign LLCs have to jump through more hoops–file more documents, pay higher yearly fees to remain registered, etc.
2 How do I set one up?
Simply go to the state's website–Wisconsin's is here–and fill out some documents. The filing fee for Wisconsin as of May 30, 2016 is $130 online and $170 in paper.
If you don't want to do all the paperwork yourself, legal services for this sort of thing is very affordable. I got a lot of good information from a single phone call with LegalZoom. If I register for an LLC, I'll probably choose this route. The reason is simple–there's no point climbing a learning curve (in this case, filing legal paperwork for a business) once; your time is better spent on other things.
3 What about taxes?
Taxation is a whole different topic from registration, and I won't try to cover it here. Talking to a tax professional would be a good idea.