However, for a Corporation to offer the most protection, you must ensure that your yearly filings with the Secretary of State's Office are made and that annual meetings are convened and properly recorded.
Operating as an LLC is just lot simpler for many small businesses.
The owners' liability is restricted with a limited liability company, and there are no yearly filing requirements like there are in a corporation. A limited liability company may be taxed as an S-Corporation, a partnership, or a sole proprietorship.
Before forming any business corporation, you should speak with both an attorney and a certified public accountant due to the potential effects on individual taxes.
Articles of Organization
By submitting Articles of Organization to the Missouri Secretary of State, a Limited Liability Company can be created. The information that must be submitted is outlined in Section 347.039 of the RSMo. A Limited Liability Company may elect to operate its business under the supervision of its members or choose one or more "managers" to oversee it.
Manager Managed
When referring to a Limited Liability Company (LLC), the term "Manager Managed" indicates that the company is led by a manager or numerous managers who have been appointed to that role. The Operating Agreement of the limited liability company (LLC) would specify the kinds of actions that the manager could do even without the owners' approval. However, significant choices like selling the company would still need the signatures of all of the company's shareholders and owners in order to be legally binding.
Being Manager Managed can be more convenient for Limited Liability Companies operating in an industry where the signature of the LLC is required frequently. It would be time-consuming to have all members sign every contract or agreement the company enters into, so having the Manager Managed structure can be preferable in these situations.
Member Managed
When referring to a limited liability corporation as "Member Managed," it indicates that all of the firm's owners (the "members") are actively involved in running the business. Certain activities that are part of a typical day can be completed by a single member of the group.
To sign any contracts or agreements, however, all members of the group need to either sign their names or give their authorization for another member to sign on their behalf if that person is not present.
Registered Agent
The Limited Liability Company's (LLC's) formal point of contact is the Registered Agent of the company. When a claim is made against the LLC, they take over the role of the company's legal representative and ensure that it is properly served with legal documents.
Operating Agreement
An Operating Agreement that outlines the company's legal terms of operation and establishes the identities of the owners (the owners of a limited liability company are referred to as members) as well as their ownership percentages in the business. A lot of people forget that they require an Operating Agreement, which is the only method to verify who the owners of the Limited Liability Company are. However, this is the only way that it can be done.
Federal Employer Identification Number (EIN)
If the LLC is not owned as a sole proprietorship operating under the owner’s individual Social Security number, then a Federal Employer Identification Number (EIN) would need to be obtained. It is usually best to have a CPA apply for the EIN to ensure that you are making the best decisions concerning how the company should be taxed.
If you have questions about these services or would like to schedule a consultation with our attorneys, please give us a call today.
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