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For area, consider North Carolina, if it has any impact.

Forms that I have seen for establishing an LLC require contact information but no actual description of the LLC's activities. Is there a need to describe the activities performed under the auspices of the LLC? How is an activity legally performed under the LLC (as opposed to the owner as a separate legal entity)?

In terms of liability, how can the owner of an LLC make it clear that they are performing some activity via the LLC, and not as a private individual?

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  • We don't give legal advice here; talk to a lawyer Commented Feb 9 at 18:31

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Is there a need to describe the activities performed under the auspices of the LLC?

No. Stating than an LLC can engaged in "any lawful activity" is typical.

How is an activity legally performed under the LLC?

By not having the LLC engage in illegal activities like selling cocaine or arranging for contract killings or brokering endangered animal parts or laundering money.

In terms of liability, how can it be clear that I was performing some activity via the LLC, and not myself personally?

In terms of contract liability, make the LLC the party to the contract and not you individually. Likewise, if LLC property has a certificate of title or is transferred by deed or a bill of sale, make the LLC the buyer. If you hire an employee, have an employment contract (even a very simple one) that names the LLC as the employer. If you sell something in packaging, put the LLC name on the packaging as the seller. If you have a website, put the domain in the LLC name and identify it as the LLC's website on the website. And, if the LLC is doing something that requires a license, get the license in the LLC name.

If you personally engage in tortious activity while engaged in LLC business (e.g. getting into a car accident that is your fault while on LLC business), both you and the LLC are liable. You can't escape liability for wrongful tortious or criminal activity you personally participate in simply because you are doing that while on LLC business.

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  • How does this come into play when purchasing and writing off items? In theory I understand that the LLC can write off purchases as expenses if it is used for the business. But without an actual legal scope of activity for the business, how can the tax authorities make a clear distinction. For example if I start a dance studio LLC, the purchase of dance shoes would be a clear Business expense. But if I start a River rafting LLC, the purchase of dance shoes would clearly be unrelated. If I were to get audited, is this just at the discretion of the auditor?
    – pixelearth
    Commented Feb 9 at 21:41
  • @pixelearth good question - you should ask it.
    – Dale M
    Commented Feb 9 at 22:49
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    @pixelearth that's the question you could ask us at the money@SE site :) Generally, in the US, unless you explicitly chose otherwise, LLCs are disregarded and are treated as you the person from tax perspective. So anything you can do on your Schedule C - you can do with the LLC. In fact, it will end up on that same Schedule C (unless you have multiple members).
    – littleadv
    Commented Feb 10 at 1:34
  • If you are audited, the auditor can ask about it and you can try to explain why it is a valid expense. If you go into river rafting and your Secretary misheard it as “river dance” and purchased dancing shoes by mistake that is a valid expense - if the auditor believes it.
    – gnasher729
    Commented Feb 12 at 9:33

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