Do members of LLC had to added to LLC at the time of filing or operating agreement is enough to show the ownership of a given member.

We are 10 friends who are trying to form a LLC and question is whether a manager is good enough or all of the members should be added to reflect the ownership in the company.

Regards…Abinder


Answer

The Articles of Organization do not control who can ultimately become a member of your LLC. As long as your Operating Agreement permits it, members can transfer their shares in the LLC among themselves or sell to outside parties to bring more investors into the company.

You will obviously want some writing documenting each member’s ownership and transfers of ownership, which can be done through an amendment or exhibit to your operating agreement.

Some states require that the LLC file reports showing the identity of the current members.

Non-residents can start an LLC in Texas?

by Julio de Melo
(Brazil)

Hi,
I would like to know if a non-resident (a person from another country with no green card or permanent visa) can start a company in Texas (or any other state, for that matter).
Thanks!

Answer

Non-residents can form LLCs in the US, including in Texas.

However, s-corporations (which includes LLCs that choose to be taxed as s-corporations) cannot have any non-citizen as a shareholder.

Is LLC best way to go?

by Gayla
(Texas)

Is an LLC the best way to go for elderly household and education services business or should I go with an S-Corporation or even try for a nonprofit corporation (if we drop the household services and just go with education)?

Answer

A non-profit will have more hoops to jump through than a for-profit LLC or s-corporation. Does your business actually qualify as a non-profit?

As to LLC vs. S-corporation, each has its disadvantages and advantages. There are ways to somewhat lessen self-employment taxes with an S-corporation, though you do not eliminate them entirely–and it comes at the cost of having the IRS second-guess what a “reasonable” wage is to pay yourself.

In addition, there are restrictions on the type of shareholders in an S-corporation (only natural persons who are US citizens), and you cannot have multiple classes of ownership in an S-corporation.

An LLC is extremely flexible, and can, in fact, be taxed as an S-corporation (however, the LLC must comply with all S-corporation rules in order to maintain S-corporation tax status).

Therefore, you need to consider your goals and requirements to determine the best entity for your needs.

 

Removing myself from an LLC in texas

Hi, I’m part of an LLC in Texas and I want to remove myself. There are 4 members including me. There is no operating agreement outlining how to do this. Everyone is in agreement and the other members want to continue operation of the LLC. how can I remove myself? What forms do I need? and what forms need to be filled in order for the other members of the LLC to continue on?
Thanks!

Answer

You want to withdraw from the LLC.

Unfortunately, Texas law prohibits a member from withdrawing from an LLC (§ 101.107).

However, your written operating agreement can override this prohibition (along with most others, see § 101.052), and permit withdrawal.

Because your LLC does not have a written operating agreement, you cannot withdraw until you have one.

My suggestion would be to draw up a written operating agreement permitting you to withdraw, and have all the members sign it.

Houston, Tx.

by Roger V.
(Houston, Tx., Harris Co.)

can you file for llc in Houston, Tx.? If so, how much is it?

Answer

Forming an LLC is done by state, not by city. So, forming a Texas LLC will be the same cost in Houston as anywhere else in Texas.

As of October, 2009, Texas charges $300 to form an LLC. This is the state fee, and does not include the fees of using a service such as Legalzoom to file the Articles of Organization and other formation documents.

Naive Question

by Mohsen
(Dallas)

Greetings,

I would consider myself a business professional but am somewhat new to the concept of founding my own business which is what I am currently considering. My question is, can I establish my business, run it initially for a limited period of time, before incorporating? this would be in an effort to assess the viability and likelihood of success before investing substantial sums of cash into the incorporation.

Answer

Yes, you can run your business before incorporating.

However, understand that you can be held personally liable for pre-incorporation activities, contracts, etc.

You have to balance the risk and reward according to your own tastes/preferences.

Depending on the type of business you’re running, incorporation expenses could be a large percentage of startup costs.

On the other hand, if you are starting up a business where you’re planning on spending tens or hundreds of thousands getting up and running (such as a franchise), you really ought to incorporate from the beginning.

Quarterly Taxes

I am a brand new SMLLC in Houston, Tx where i work and live, and i am wondering if i have to do a 1040ES next year. I just started so I don’t have anything to go off of.

Answer

You do your 1040ES based on last year’s 1040.

Remember, your 1040ES is based off your personal income tax return.

Your 1040 is the “home base” for all your taxes. The profit and loss from your single member LLC “flows through” to your 1040, and either increases your taxable income (if you made a profit), or decreases it (if you show a loss).

So, if you were employed at a job last year, and made a salary of $X and reported it on your 1040, use those numbers for your 1040ES this year.

Your single member LLC is just another source of potential income for next year (similar to if you planned on taking on a second job next year).

Assuming you pay the minimum amount based on last year’s income, you will not be subject to penalties, if, for example, you make a whole bunch of money next year.

You will of course, have to make up all the difference the following April 15…but you won’t be hit with additional penalties for not making the required estimated payments.

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