For Oklahoma LLC prices and State fees, please visit the costs page for forming an LLC in Oklahoma.
The main reasons to form Oklahoma Corporations or Limited Liability Company are lawsuit protection, credibility, tax savings, deductible employee benefits, asset protection, anonymity, the ease of raising capital, creating a separate legal entity for personal protection, a Oklahoma LLC has a broad range of powers beyond that of a sole proprietorship, small claims court benefits, separate liability for corporate debts, and perpetual duration. When you form Oklahoma Corporations or LLC you create a separate legal person. You are a shareholder. You can control the corporation. However, when the Oklahoma business is sued you can be protected from being sued personally when incorporate a Oklahoma LLC or form Oklahoma Corporations.
Oklahoma LLC and Oklahoma Corporation - Reduces Personal Liability
When you form a Oklahoma LLC or Oklahoma Corporation you create a separate person from the one or ones who own it. Therefore, when a Oklahoma LLC is sued, there are provisions in the law to protect the owners (members) and managers from personal liability. Once you do business with the public or have even one employee, you are wide open to legal liability. Year after year there are thousands of us who lose nearly everything we have due to personal liability with our unincorporated businesses. In addition, once you do form Oklahoma Corporations or LLC it is important that your business follows certain, relatively simple, formalities so that it looks and acts like a separate legal entity.
Oklahoma Corporation and Oklahoma LLC - Tax Advantages
There are more tax deductions available to a Oklahoma LLC than to businesses that are not LLCs. A few examples of the benefits you can enjoy when you form a Limited Liability Company in Oklahoma include medical expenses, pension plan, business trips and entertainment. It is reported the group with the highest percentage of tax audits is the one that includes the Schedule “C” form filed by the self-employed. The audit rate for the Oklahoma LLC is much lower than the Oklahoma self-employed. You may own and be employed by your Oklahoma LLC at time same time, thus, eliminating the Schedule “C” self-employment return from your list of filed IRS tax documents. The IRS seems to give preferential treatment to Oklahoma LLC and Oklahoma Corporations with regard to tax deduction.
Oklahoma Corporations and LLC - Deductible Employee Benefits
When you form a Oklahoma LLC you can provide for a wide-array of tax deductions for you and your employees. Even a one-person Oklahoma LLC or Oklahoma Corporation can enjoy tremendous tax-deductible benefits such as health insurance deductions, travel deductions, automobile deductions, entertainment deductions, recreational facilities and many more. One of the most beneficial deductions is the pension plan or 401K. Money placed in a properly structured pension plan is tax deductible and the funds grow tax-free for retirement. These outstanding benefits alone can pay for a Oklahoma LLC or your Oklahoma Corporations many times over.
Oklahoma Corporations and LLC - Asset Protection
A lawsuit typically comes from one of two directions: business or personal. When your business is sued – someone slipping and falling in your place of business, getting into an automobile accident during working hours, for example – there are provisions in the law so that either a Oklahoma LLC or Oklahoma corporation can protect you from being sued personally. However, when you are sued personally – getting into an automobile accident during non-working hours and getting sued for more than your insurance coverage, for example, the Oklahoma LLC or Oklahoma Corporations may provide better protection. A Oklahoma LLC has members. Oklahoma corporation has shareholders. Corporate law allows your stock to be confiscated in a personal lawsuit. In contrast, there are provisions in the law such that when you are sued personally, your membership in your LLC may be protected from being taken away from you. This is one reason why the Oklahoma LLC has become the most popular choice for owing assets such as real estate.
Oklahoma LLC and Oklahoma Corporations - Anonymity
Owning an asset in your own name, such as a business, an investment property or an automobile, provides an easy target for one performing an asset search. Before initiating a lawsuit, it is quite common for an attorney to perform an asset search. If no assets can be located in your name this may decrease the chance that litigation will be pursued. Placing assets in the name of a Oklahoma Corporations and Limited Liability Companies may provide a cloak of privacy between you and those contemplating legal action against you. This privacy is enhanced when “nominee” managers are listed. With the Companies Incorporated Nominee Privacy Service, you retain ownership and control of your company. However, you elect Companies Incorporated representatives (who have no control or ownership of your Oklahoma LLC) to be listed in the public records.
Oklahoma Corporations and Oklahoma LLC - Raising Capital
There is a greater source of capital available to Oklahoma LLC and Oklahoma Corporations than to partnerships or proprietorships. Because the Oklahoma LLC is separate from the owners, people tend to be more willing to invest money without accepting liability or responsibility for company business. The Forbes 400 list of wealthiest Americans are full of individuals who hold the highest percentage of their wealth through ownership of companies they or their family members started. Many sole-proprietorship or partnership businesses are sold for one to two times annual earnings. Whereas, many companies are valued at between 12 to 25 times annual earnings or more.
Oklahoma LLC - Separate Legal Entity Status
Because you and your Oklahoma LLC are two separate legal entities, lawsuits brought against your company do not need to affect you personally. When the Oklahoma Limited Liability Company borrows money, there are measures such that you are not personally liable to repay the debt. A Oklahoma LLC remains after the life of the owner(s). However, a sole proprietorship ceases to exist after the life of the owner.
Oklahoma Corporation and Oklahoma LLC Broad Range of Powers
An Oklahoma Limited Liability Company may engage in any lawful activity, including, but not limited to the following:
Oklahoma LLC has the power to hold, purchase and convey real property and personal property and to mortgage or lease any such real and personal estate with its authorization. An Oklahoma LLC has the power to hold real and personal property in any state, territory or country.
- Has the power to make contracts.
- May exist continuously, even after the death of the owner(s).
- Has the power to borrow money when necessary for the transaction of its business, or for the exercise of its company rights, privileges or franchises, or for any other lawful purpose of its formation.
- Oklahoma LLC and Oklahoma Corporations can issue bonds, promissory notes, bills of exchange, debentures, and other obligations and evidences of indebtedness, payable at a specified time or times, or payable upon the happening of a specified event or events, whether secured by mortgage, pledge or otherwise, or unsecured, for money borrowed, or in payment for property purchased, or acquired, or for any other lawful object.
- Oklahoma LLC and Oklahoma Corporation has the power to sue and be sued in any court of law or equity.
- Has have power to appoint such officers and agents as the affairs of the company shall require, and to allow them suitable compensation.
- Has the power to make an operating agreement not inconsistent with the constitution or laws of the United States, or of the State in which the LLC is formed, for the management, regulation and government of its affairs and property, the transfer of its stock, the transaction of its business, and the calling and holding of meetings of its stockholders.
- Has the power to wind up and dissolve itself, or be wound up or dissolved.
- Has the power to adopt and use a company seal or stamp, and alter the same at pleasure.
- Has the power to guarantee, purchase, hold, sell, assign, transfer, mortgage, pledge or otherwise dispose of the units of membership of, or any bonds, securities or evidences of the indebtedness created by, any other company, while owners of such units, bonds, securities or evidences of indebtedness, to exercise all the rights, powers and privileges of ownership, including the right to vote, if any.
- Has the power to purchase, hold, sell and transfer units of its own membership, and use therefore its capital, capital surplus, surplus, or other property or fund.
- Has the power to conduct business, have one or more offices, and hold, purchase, mortgage and convey real and personal property in any of the several states, territories, possessions and dependencies of the United States, the District of Columbia, and any foreign countries as allowed by law.
- Has the power to do all and everything necessary and proper for the accomplishment of the objects enumerated in its Oklahoma certificate or Oklahoma articles of organization, or any amendment thereof, or necessary or incidental to the protection and benefit of the LLC, and, in general, to carry on any lawful business necessary or incidental to the attainment of the objects of the LLC, whether or not such business is similar in nature to the objects set forth in the certificate or articles of organization of the company, or any amendment thereof.
- Has the power to make donations for the public welfare or for charitable, scientific or educational purposes.
- Has the power to enter into partnerships, general or limited, or joint ventures, in connection with any lawful activities, as may be allowed by law.
Oklahoma LLC and Oklahoma Corporations - Small Claims CourtA Oklahoma Limited Liability Company may send a manager, officer, director or an employee to represent the company in most small claims courts. Unlike a sole proprietorship, this can free up the time of the owner to operate the business while employees take care of legal matters.
Oklahoma Corporations and Oklahoma LLC -Separate Liability for Corporate Debts
A Oklahoma LLC and Oklahoma Corporations are separate from those who own it. If the company loses a lawsuit or has a debt it cannot pay, the Oklahoma LLC itself is responsible. The Oklahoma Limited Liability Company can provide a strong shield to protect the personal assets of the members and managers. In contrast, with a sole proprietorship or partnership, the owners can lose personal assets in a business lawsuit. If the members and/or managers have personally guaranteed corporate debts, of course, they can be held liable. In addition, the Oklahoma LLC must be established and operated properly for the legal shield to remain in place. For maximum protection, it is legally prudent to treat the Oklahoma LLC as a separate legal entity. For example, it is important to pay company expenses with company money (or be sure the company promptly reimburses you for business expenses if you have paid them personally). Conversely, you would not pay your personal electric bill with company money. Instead, the company pays you a salary from the company checking account (which is a tax-deduction for the company). You deposit your salary check in to your personal checking account and use those funds to pay your personal electrical bill.