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December 7, 2023, 10:52 am

5 Things I Wish Id Known Before Starting an LLC by Chaunie Brusie

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  • Update Time : Monday, February 22, 2021
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can an accountant set up an llc

Any person over the age of 18 can start an LLC.This includes non-US citizens and non-US residents. llc accounting If you follow our recommendations, the entire process takes only a couple of hours.

What business can I start with accounting degree?

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If you aren’t under pressure to form your LLC right away, you can potentially save yourself future aggravation by carefully choosing the exact name you want for your LLC. Be sure to check the LLC statute in your state of formation to make sure your preferred LLC name satisfies all legal requirements. You will also need to make sure that the name you want is available in your state. In some cases, for example if you will be selling goods and collecting sales tax or if you have employees, you’ll need to register with the Colorado Department of Revenue . For more information on state LLC tax registration, see Nolo’s article LLC Annual Filing Requirements in Colorado. An available name may be reserved for 120 days by filing a Statement of Reservation of Name with the Colorado Secretary of State. The form must be filed online at the Secretary of State website.


The purpose of a limited liability company is to protect your personal assets. If your business gets sued or goes bankrupt, your personal assets, such as houses, cars, and savings, are not at risk. Another advantage of forming an LLC is pass-through taxation. Essentially, this means all profits and losses of the business go directly to the owners. You can continue to file the profits and losses on your personal income tax forms, without the complexity of filing business taxes.

can an accountant set up an llc

A single-member LLC is a type of limited liability company, which is different from a sole proprietorship. Unlike sole proprietorships, a single-member LLC is formed by filing organization documents with your state government office. By starting an LLC for your accounting firm, you can protect your personal assets and increase your tax options and credibility. Most accounting firms will benefit from starting a limited liability company . UpCounsel is an interactive online service that makes it faster and easier for businesses to find and hire legal help solely based on their preferences.

Can One Person Form an LLC?

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  • Instead, you can use a fictitious business name, also called a trade name, “DBA” , or assumed name.
  • Usually, Annual Reports are due once a year on or around the anniversary date of the LLC.
  • Another advantage of forming an LLC is pass-through taxation.
  • By clicking “Send Message” you agree that we may review any information you send to us before you and the firm execute an engagement letter.
  • Before that, you’ll need to open a business bank account with them first.
  • And, often that’s by use of a business entity in which they can run their business.
  • It means that the owner’s personal assets are protected if the company is sued or goes into debt.

You can start your LLC entirely online.You can do it yourself or hire someone to do it for you. The formation services that we recommend can create a standard LLC for a starting price of $39 + state fees. If business entities could avoid business income taxes simply by forming in Nevada or Wyoming, then everyone would form their businesses there. An LLC has a number of advantages — one of the most important being that it protects the owners from many of the company’s liabilities. In most cases, if a client or vendor sues the company, the LLC prevents them from getting to the owner’s personal assets. The most notable exception is when the owners engage in illegal activities, but it does protect personal assets from judgments for most lawsuits, such as property damage done by a worker. Many small business owners feel their company is too small to bother with incorporation.

Compliance: Sole proprietorship vs. LLC

If the name is not available, the LLC must provide an assumed entity name for use in Colorado. For help creating an LLC operating agreement, see Form Your Own Limited Liability Company, by Anthony Mancuso . If an operating agreement is created, it need not be filed with the Articles of Organization. Your LLC’s name must be distinguishable from the names of other business entities already on file with the Colorado Secretary of State. Names may be checked for availability by searching the Colorado Secretary of State business name database. On the downside, S-Corps must buy insurance coverage, such as worker’s comp and disability.

They are also allowed them to take advantage of employee and retirement benefits that they would not have as sole proprietors. Health expenses can also be purchased through certain kinds of corporations established by freelancers.

Create an Accountant-Attorney Team

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When the state approves them, your LLC is considered officially formed. This means that you can technically appoint yourself as your registered agent. When a state needs to send you correspondence or paperwork, they reach out to your LLC’s registered agent who then transfers the documents to you. Most states issue a set of location-specific requirements for what they view as acceptable LLC names. This is an essential part of your LLC formation, and failure to adhere to these rules may lead to the rejection of your LLC application. For this reason, most experts recommend local LLC formations, i.e. registering your entity in your home state unless the LLC in question is a part of a planned expansion. (Note that some states require accounting businesses to be Professional Liability Companies rather than LLCs).

Prepare an Operating Agreement

Using a dedicated business banking account for your accounting firm is essential for personal asset protection. The cost of an LLC depends on which state you form your LLC in. The primary cost of forming an LLC for your accounting firm is the state filing fee. An S corporation is an IRS tax status that an LLC can elect. S corp status allows business owners to be treated as employees of the business . If you elect to be taxed as a C corporation, you will complete your tax return separately—income and losses from the business don’t flow through to your individual income tax return.

  • The corporate veil initially only applied to the corporate shareholders.
  • The purpose of this number is similar to SSN, except here, it’s used for tracking the financial activities of businesses rather than monitoring your individual responsibilities.
  • We strongly recommend against choosing a full formation package solely for its inclusion of the EIN service—you can do this filing for free in your own time.
  • Often, it’s best to file an LLC as soon as possible after starting a business.
  • LLCs are a simple and inexpensive way to protect your personal assets and save money on taxes.

This guide answers the common questions for creating a Limited Liability Company for your new business. A Limited Liability Company must also pay attention to the ongoing compliance requirements it must fulfill to remain a legal entity in good standing with the state. The general rule of thumb is that if an LLC has fewer than five members, it’s probably best to register in the state where members live or where the business has a physical presence . Registering in a state that’s different from where the LLC has a physical presence brings additional fees and paperwork. For most small businesses, the added hassle and costs aren’t worth the potential advantages that come from being registered out of state.

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