, 2025
This content is for general informational purposes only; it is not tax/legal advice.
Table of Contents
- What is an LLC?
- Advantages / disadvantages
- Formation steps
- Cost items
- Frequently asked questions
One of the most popular ways for entrepreneurs who want to do business in America is to establish a Limited Liability Company (LLC). Suitable for both domestic and foreign investors, this structure is preferred due to its flexible management style and advantageous tax system. In this article, you will find answers to all questions such as what is an LLC, how is it established, what is its cost, and what are the differences from other company types.
What is an LLC Company?
LLC (Limited Liability Company), meaning "Limited Liability Company" in Turkish, is one of the most preferred business types in America.
This structure combines the flexibility of sole proprietorships with the legal protection of corporations. In other words, LLC owners (members) are not personally responsible for the company's debts and obligations.
An LLC can be established by a single person (Single-Member LLC) or with multiple partners (Multi-Member LLC). This flexibility makes it preferred by a wide range from small businesses to international investors. Thanks to Suits Finance, you can follow the entire process with peace of mind, continue your business without interruption, and go global.
What are the Features of an LLC Company?
The prominent features of an LLC are
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Limited liability: Members' personal assets are not at risk due to company debts, lawsuits, or obligations.
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Tax flexibility: LLCs are subject to "pass-through taxation" by default; meaning income is directly reflected in members' personal income tax.
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Ease of establishment: The setup process and paperwork are simpler compared to Corporation types.
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Management freedom: The company can be managed by members or professional managers can be appointed.
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Flexible profit distribution: Profit shares can be distributed according to members' contributions or special ratios in the contract.
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Legal recognition: Valid in all states in the USA and foreign investors can easily establish one.
How is an LLC Company Established?
Establishing an LLC in America varies by state, but generally the following steps are followed:
1. Determining Company Name
The LLC name must be unique in the state where it will be established. The name usually must include "LLC" or "Limited Liability Company."
Example: "Sunrise Consulting LLC"
2. Appointing a Registered Agent
Every LLC must have a registered agent in that state. This person or company is responsible for receiving official documents and government correspondence.
3. Filing Formation Documents (Articles of Organization)
Articles of Organization are filed with the state's commerce department (Secretary of State). This document contains basic information such as company name, address, members, and registered agent information.
4. Preparing Operating Agreement
Although not mandatory in some states, preparing an Operating Agreement is recommended.
This document determines the company's internal operations, profit distribution, and management style.
5. Getting EIN Number (Employer Identification Number)
An EIN is obtained from the IRS (US Tax Authority). This number is required for tax transactions, bank account opening, and employee hiring.
6. Opening a Bank Account and Getting Business License
A US bank account is opened in the company's name. Some states may require additional licenses or permits (for example, in sectors such as food, health, consulting).
How is an LLC Company Taxed?
The taxation system of LLCs is quite different from other company types.
By default, LLCs are subject to pass-through taxation:
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Company profits are transferred directly to members,
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Members include this income in their individual income tax returns,
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The company does not pay a separate corporate tax.
However, LLCs can also request to be taxed like a C Corporation or S Corporation if they wish. In this case, the tax burden can be reduced in some situations (especially in high-income businesses).
Also, LLCs may need to pay state taxes in addition to federal taxes.
Therefore, which state to incorporate in directly affects the total tax burden.
Advantages and Disadvantages of Establishing an LLC Company
Advantages
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Personal asset protection (limited liability)
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Tax flexibility - income is taxed through members
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Ease of setup and management
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Can be established by foreigners
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Transparency and legal reliability
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Reputation: Provides international trust as a company established in the USA
Disadvantages
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There are annual report and renewal fees
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Difficulty in raising investment: Large investors generally prefer the Corporation structure
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Complex tax rules may apply in some states
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The bank account opening process may take time for foreign owners
Is it Logical to Establish an LLC in America?
If you want to do business in America, establishing an LLC is a very advantageous option in terms of both cost and management. The setup process is simple, the taxation system is flexible, and the level of legal protection is high. However, it is important to get expert support to make the right decisions about which state to incorporate in and the taxation method.
Frequently Asked Questions
- Can foreigners establish an LLC in the USA?
Yes. However, tax classification, filing obligations, and banking vary according to your situation.
- How is a single-member LLC evaluated for tax purposes?
By default, it is considered a "disregarded entity" (through the owner). If desired, Form 8832 can be used to elect corporation taxation.
- LLC or C-Corp?
Raising investment/option structure and growth plans may favor C-Corp; LLC is more frequently chosen for small/medium scale and flexibility.
Contact / Support (optional)
You can proceed with Suits Finance for formation, Registered Agent, EIN, and compliance processes.