Married couples share many things, which often includes tax returns. With limited-liability companies (LLC) offering the benefit of pass-through taxation, married couples gain the benefit of simplifying their tax filing. Setting up an LLC as a husband and wife requires filing and remaining compliant with the appropriate entities in your state.
Articles of Organization
When starting an LLC, articles of organization must be created. Articles of organization are a legal statement of your decision to form a LLC. Articles of organization list important data about your business, including where the business is located and the name of the owners. The articles of organization should also include the name of your business followed by the designation "LLC." Add the name of both the husband and wife as owners of the business in your articles. Select one of you as the registered agent for the business. "A registered agent is a person or entity authorized and obligated to receive legal papers on behalf of an LLC," explains Michael Spadaccini of Entrepreneur magazine.
Owners of an LLC are called members. The managing member is the member with day-to-day control of the business. If both a husband and wife plan to operate the LLC jointly, both should be listed in the articles of organization as a member. Members have voting rights based on rules created in an operating agreement. Each LLC member is legally responsible for filing business profits and losses on his or her tax return as an LLC is a tax reporting and not a tax paying entity. If a husband and wife file jointly, this can make filing taxes more convenient.
An operating agreement is essentially a plan of how the business will operate internally. A husband and wife should hold a formal meeting to determine how they plan to vote on important decisions, how profits are allocated and how they will handle transfer of ownership in case either spouse decides to exit the business. In the event the couple gets a divorce, this agreement can help resolve any conflicts. Once members sign the operating agreement, they are bound contractually to its terms.
Once an operating agreement is created and the articles of organization are formed, the information must be filed with the secretary of state. There is typically a filing fee due at the time that application is submitted. Once the secretary of state receives and registers the business, the couple should receive a copy of their articles of organization in the form of a certificate.
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