Start a Web Hosting Business - Step 3

A Limited Liability Company is designed to provide the limited liability features of a corporation and the tax efficiencies and operational flexibility of a sole proprietorship and partnership. The actual formation is a little more complex and more formal than that of a sole proprietorship and/or partnership. A LLC does have members but can also be formed by just one person (=1 member). Basically - a LLC receives the corporation’s protection from personal liability for business debts and the tax structure of partnerships and sole proprietorships.

Advantages of a Limited Liability Company (LLC)

- Members have limited liability
- Actual taxation might be more benfitial for the members
- Business form looks more professional than a sole proprietorship in many cases
- A LLC only needs one member

Disadvantages of a Limited Liability Company (LLC)

- A LLC cannot seek funding by offering shares to shareholders
- The liability protection can be removed by a judge if it is obvious that the members did not run the business as a LLC but as a partnership / sole proprietorship
- Less laws that govern the LLC. This could be a problem in complicated business situations

Fees - State of Colorado

http://www.sos.state.co.us/pubs/info_center/fees7_01_04.htm

Online Business Registration with the State of Colorado

http://www.sos.state.co.us/pubs/business/update09_15_04.htm