When you incorporate your business, it is very important to get it right the first time. After all, you don’t want to launch your new company under a cloud of impropriety.
You chose an LLC over a sole proprietorship or some other business structure for solid and logical reasons, so you naturally want to ensure that you follow through and set up your LLC correctly. Read on for some additional information on the topic.
Keep up with the paper chase
When you incorporate your LLC with the Pennsylvania Secretary of State’s office, you must include all the appropriate documents. Make sure your articles of incorporation, city permits, state licensing and federal and state tax returns are up-to-date and filled out correctly. Should you drop the ball here, your LLC could get revoked and you will lose any of the protections from liability that your LLC conveyed.
You could lose tax benefits
All business structures have pros and cons regarding the way the Internal Revenue Service (IRS) taxes them. LLCs use pass-through taxation, so the company itself is exempt from paying federal taxes and LLC members pay their share via the personal tax returns they file. If you accidentally filed as a C-Corp, you are then subject to double tax rates as a corporate entity and an individual. Nobody wants that when they can avoid it.
What to do if you make a mistake setting up your LLC
Things go wrong, and everyone makes mistakes. The important takeaway here is that you realize the problem and fix it. Your business law attorney can intercede and correct any inaccuracies and assure that your LLC is back on track for your future success.