Can You Save Money When You Form An LLC?

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If you are interested in starting a business, one of the easiest ways is through the formation of a limited liability company, also known as an LLC. This business option is not very expensive, but it does have some associated costs. However, there are some ways to keep your costs down. Here are some things you need to know if you are going this route to form your business.

Why Are Some Business Owners Reserved About Forming an LLC?

For some business owners, they can be reserved about forming an LLC right away. Many believe that this is a costly expense, and they do not have the funds to get started. Fortunately, forming an LLC is not as expensive as you may think.

An LLC offers a way to start a business as a separate entity. Unlike a sole proprietorship, in which you essentially start a business with your social security number, you are not held personally liable for the debts of your business. If you go out of business, for instance, and you owe money to the creditors of your business, the creditors must go after the assets of your business. Without an LLC, creditors can go after your personal assets, including your house, to get those debts repaid.

Can You Form Your Own LLC?

You can form an LLC yourself as long as you are comfortable with gathering and filing the necessary paperwork the process requires. You will need to file incorporation statements in your state. This includes your articles of organization. You will also have to pay the fees, which vary by state.

If you file the LLC yourself, you can save a lot of money. However, not everyone is comfortable with doing this. There are some business models that are also more complicated and require more legal oversight.

If you want to save money by forming the LLC yourself, contact your state's Secretary of State for the necessary paperwork and to pay the fees.  

What Are the Other Options for Filing?

If you do not want to form your own LLC, you have a few other options. You can use an incorporation service. This is a service that will set up your LLC for an added fee. One thing to remember, however, is this is not a legal service, and it cannot provide you with any legal expertise should you have any questions about the process.

If you use either of these options, you may still want to have your attorney review the documents to ensure they are complete and correct. The last thing you want is to have your LLC held up because you made an error. An attorney will not charge you as high a fee just to review the documents as they would if they were to file the LLC for you.

For more information or help setting up a business, reach out to a business lawyer.