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Can I Ever Be Held Liable For My LLC?

Can I Ever Be Held Liable For My LLC?

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Anyone looking to incorporate a business in San Diego has at one point or another wondered if an LLC would be the best choice of business entity. Luckily, you can always seek the best LLC service San Diego has to offer and find out! After all, having someone capable of providing the full scope of LLC services with unwavering professionalism will give you a sense of much-needed relief. 

In the meantime, let us focus on the key reason why people are considering this type of entity in the first place: limited liability. 

When it comes to the matter of finances, you need to have a clear overview not only of the costs of setting up an LLC, but also of the potential for personal liability in worst-case scenario. 

Can I be registered agent for my LLC?

In short, yes, it is possible as long as you reside in the state where the LLC is registered. In other words, you need to have a physical address in the state of California. Bear in mind that your LLC cannot act as its own registered agent.

Can you use your home address for LLC?

As mentioned above, you are allowed to act as your LLC’s registered agent designated to receive Service of Process on behalf of the company. Accordingly, you are allowed to make your home address the registered agent address of your limited liability company. 

But will this put you, your company or your property at risk?

Not really, but bear in mind that your address will be publicly visible. In all states the same rule applies: the address of the registered agent has to be publicly visible, which means that literally anyone can look up and find your home address.

At best, you can expect to get an abnormal amounts of junk mail, as this is the case with all newly formed companies. And then there is the issue of invasion of privacy, so keep that in mind if you want to keep your connection to the LLC secret. Also, you will receive court summons delivered to your home address if the company is ever sued, which is embarrassing to say the least.

If you have concerns because of any of this, you might want to look at other options. 

How does owning an LLC affect my taxes?

When you are a newcomer to the world of business, there is always the intimidating possibility that something will slip through the cracks. For you to bring out the entrepreneur in you with confidence, you are probably going to need a helping hand, especially in terms of taxes. 

Hiring tax professionals is your best course of action, both in terms of your individual taxes and in terms of the taxes that apply to your business. But what are the tax implications of being a member in an LLC?  

Limited liability corporations use so-called pass-through taxation, which means that the company itself does not pay taxes but its members do. They do it by claiming the income of the business on their own tax forms alone, meaning there is no double taxation. However, an LLC can also opt to be treated as a corporation for tax purposes and use lower tax rates. 

Am I personally liable for an LLC?

The limited liability principle is by far the greatest benefit of an LLC. It stipulates that the owners or members of a limited liability company will not be held liable for the company’s debts or legal judgments. If the LLC does go into debt, creditors will not be entitled to take the personal funds or property of the company members, unless in extreme cases such as veil piercing.

What does it mean to pierce the corporate wall?

“Veil piercing” or “piercing the corporate veil” is a phenomenon that typically applies to close corporations which are in debt or being sued. Namely, the term describes a scenario when courts put aside the limited liability principle so that the directors or shareholders of the corporation are held personally liable instead. For veil piercing to take place, it is necessary to prove that a fraud has taken place.

The absolute best LLC service San Diego has to offer

Here at David York’s Tax Service, located in San Diego’s Mission Valley, you will have a competent team with a long and successful track record in business formation at your service. We will plan out the whole process down to the last detail and carry it out from start to finish. 

Starting a successful business takes a lot of hard work, so why not let us handle the technicalities while you focus on the essentials? We’ll get to work as soon as you reach out to us to ensure that the process goes as quickly and smoothly as possible.