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Find FAQs related to starting an LLC.
Yes. Recent changes to the IRS code have promoted changes in state laws permitting LLCs to be created with an unlimited life.
Each state charges an annual fee to maintain an LLC. In many states, you must also submit an annual report or statement of information, which is a one-page form sent by the state. Some states also have state taxes. The annual fees for three popular states—California, Nevada and Delaware—are as follows (prices shown are as of 2015):
California: A $20 reporting fee and a statement of information are required 90 days after formation and then every two years. An annual $800 LLC tax is due by the 15th day of the fourth month after LLC formation and every year thereafter. If the LLC's income exceeds $250,000, it will owe an additional LLC tax based on the income amount.
Nevada: A $150 fee and the Initial List of Managers or Managing Members, as well as a $200 fee and a Business Licence Application, are due within 30 days of formation. There is no state income tax.
Delaware: There is an annual LLC tax of $300 due each June 1st, beginning the year following formation. There is no state income tax.
New York: Every LLC must publish notice of its formation in two newspapers in the county in which it was created. In some areas, the fees for this publication can run up to $2,000. The company must then submit a certificate of this publication to the state, together with a $50 filing fee. For LLCs that choose to be treated as a partnership, there are annual taxes that are based on total income (from a minimum of $25 to a maximum of $4,500).
Every other state: Contact a local accountant.
LegalZoom can help you save time when you form an LLC. Answer a few questions in our online questionnaire, we’ll check your answers for consistency and completeness, and file the required documentation with your state. Once your LLC is formed, we send you a final package with all of your documents. We also can help you get in touch with independent attorneys to answer questions about your business.
Although an S corporation shares many of the same tax characteristics as an LLC, an LLC has more flexibility and fewer restrictions than an S corporation. An S corporation cannot have more than 100 stockholders, cannot issue more than one class of shares, and is subject to more formalities than an LLC. However, owners of an LLC are required to pay Social Security and Medicare taxes on profits. Corporate stockholders are not required to pay these taxes on profits over and above the stockholders' salaries.