by David J. Eloi

Created on: June 15, 2009   Last Updated: June 24, 2009

How to set up a LLC for your online Business

The number of online businesses currently operating on the World Wide Web is estimated to be well into the billions. That's a lot of business owners exposed to the inherent risks of conducting business in the market. Creating an online presence for an online business is crucial but establishing yourself as a legitimate and legal business entity is also very important.

Many online entrepreneurs are choosing the Limited Liability Company (LLC) as a tool for risk protection. The LLC grants the business owner a legal shield or insulation from potential liability claims against the business. Additionally, owners of LLCs enjoy a simplified tax process in that they pay their self-employment tax once a year on April 15, just like their personal income tax. A single-member LLC files a 1040 tax return but also attaches a Schedule C form which includes the finances of the LLC.

How to set up the LLC?

First, let me point out that this information is not meant to be official advice. Consult a professional. The easiest way to set up the LLC is to hire a company that specializes in this process. Alternatively, setting up the LLC yourself is easy and relatively inexpensive.

Although, the online business owner can choose to create the LLC in any State it is recommend that business owners establish the LLC within the state where you have the most physical presence (i.e., the owner's state of residency, see qualifying below) or you will create more problems for yourself when tax season arrives setting yourself up for double taxation.

Setting up the LLC is accomplished in only a few steps taken through the local secretary of state's office:

Choose an available business name. File the paper work or articles of organization, and pay the filing fee. Establish an LLC operating agreement, which sets out the rights and responsibilities of the LLC members. Publish a notice of your intent to form an LLC (required in only a few states). Obtain any licenses or permits required for your business.

Requirements to form a Colorado LLC:

State of Colorado LLC Filing Fee: $50

Our Service Fee: Only $35 - Includes Federal Tax ID # (FEIN)

Total cost for forming a Colorado LLC: $85

How long will LLC formation in Colorado take?

Standard Filing Time - About 5 business days
Expedited Filing Time - 24 to 48 Hours

How to name a LLC in Colorado:

When forming an LLC in Colorado the name must not be deceptively similar

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