Tech LLCs

What Tech LLCs Need Before They Can Begin Operating

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Companies have had their share of struggles these past couple of years, each finding ways to stay afloat. Some of them saw refuge through registering as an LLC and becoming a hybrid form of business entity. In fact, a 2021 report by shows that 35% of small enterprises described the structure of their business as an LLC. For tech companies, there are a lot of advantages to going down the LLC route — but it needs a lot of preparation, too.

Here’s what you need to know before you begin operating as a tech LLC.

Defining LLCs

According to a Limited Liability Company or an LLC is a hybrid form of business entity that enjoys the best features of a corporation and a partnership. After Wyoming enacted it first in 1977, all states passed legislation and modified it to become the LLC we know of today. That said, different states in the US have different regulations, but there are some features that are standard to most. 

Owners of an LLC or members can include individuals, corporations, foreign entities, and other entities. There is also virtually no limit to the number of members who can join, and single-member LLCs are also permitted by most states. Companies also experience the benefits of being a “flow-through entity”, a structure that allows income to be passed straight to members, as discussed by

Steps Required to Start an LLC

1. Check with Your State

It’s very important to check the law restrictions applicable to your state beforehand. For example, some states will require an LLC operating agreement, which is a roadmap describing how your LLC will be run, while others don’t require it upfront. Each state will also have its own form, procedure, as well as a filing fee, but this amount can vary from state to state.

2. File Your Paperwork

Generally, you’ll be required to list things such as the name and address of the LLC, the length of its runtime, the personal information of its registered agent, and its purpose. For companies with more than one member, an Employee Identification Number or EIN will also be required. explains that this will also serve as your business ID, and is mainly used for taxes, business bank accounts, hiring employees, and building business credit.

3. Claim Your Certificate

After an application for an LLC is filed and approved, the state will issue a document that will formally acknowledge the existence of your LLC. If your tech company will do business in more than one state, you will need to register it in those specific states as well. Afterward, it’s all a matter of managing business operations, paying your taxes, and maintaining credibility with customers and creditors.

Learning the Advantages of an LLC for Tech Companies

As its name suggests, LLCs allow for limited liability as in the case of a corporation, as well as the pass-through taxation feature of a partnership. For tech companies, this liability protection will apply in cases of workplace incidents, slander, trademark infringements, and others. Moreover, it also gives you flexibility when it comes to operation and management, making it an easy and efficient way to run a company.


All in all, LLCs will provide a good combination of flexibility, protection, and tax benefits. This is especially beneficial to any tech companies that are just getting started, or companies that are considering switching to become a more manageable type of business entity. Of course, it’s essential to consult expert opinion and thoroughly do the groundwork before committing to the decision.

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Also Read: The 10 Most Advanced Automotive Tech Companies of 2020



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