Factors To Consider When Forming A Limited Liability Company
There has been an increased popularity of limited liability companies for small firms looking for flexibility and personal liability protection. The requirements are not the same in all states. However, setting up an LLC is a simple process that takes a few hours depending on how complex your organizational structure is. Below are a few basics to help you set up a limited liability firm.
The first step is to get a copy of an LLC form from your state. You can check for the form online or with the secretary of state office. Make sure you find out in advance if you need to post a notice in the newspaper before you set up an LLC.
Ensure you are well aware of the rules regarding business names. You need to pick a business name that complies with the rules of the state. You will find that every state has a list of words that are prohibited. The legal name you choose needs to end with an LLC designator. Avoid choosing a name that is the same as another LLC found in your state.
The next step is filling out the LLC article organization form. You are required to provide details about your business name, the purpose of business and principle of his address. You are also needed to fill names of the initial members and the registered agent for your legal documents.
Depending on the requirements of the state you may have to put a notice in the local newspaper. You should state your intention of forming an LLC. It is advisable to do this before filing articles of organization. For you to be sure, you need to confirm with the secretary of state in advance.
After you have filed the articles of organization form where you need to send it to the secretary of state together with their filing fee. You need to be keen because there are certain states that have a corporate fee which is different from the filing fee but must be paid during filing. It is important for you to have an LLC operation agreement after doing the legal filing. This is not necessary if you are the only owner of an LLC. This written agreement that includes the terms is vital if you’re more than one owner of the LLC. The agreement includes the financial as well as the management responsibilities and rights of the members.
You need to be in agreement with your business partners. This is why you need to decide on the details of the operating agreement in advance before you file the LLC articles of organization. Doing this in advance will help you identify business partners who are not interested in becoming part of it and find someone else before you consider filing. It is advisable to set up an LLC in the same state you do business.