A limited liability company is a business structure in which members have liability protection and many more other benefits. Unlike other business structures like corporations, can be relatively easier. The exact requirements for starting a limited liability company may vary from one state to another, but here are a few general guidelines of what you can expect in the process of establishing one.
- Choose a business name
The first step toward LLC Startup is to decide on a business name. Your business name can be anything you feel will help push your business to the top, but it must meet the requirements of your state. State laws require that you use only a business name that has not been used by another business in that state. You may also have to add the acronym LLC or Limited Liability Company at the end of your chosen business name.
- Find a registered agent
To form an LLC, you are obliged to have a registered agent, whose role is to receive official and legal documents on behalf of the LLC before passing them on to the person in charge of the LLC. You can choose anyone to be your agent as long as they are at least 18 years old and are always available during working hours at an address within your state. Alternatively, you can hire a company that offers registered agent services, but it will definitely come at a fee.
- Prepare the LLC Article of Organization
An Article of Organization is simply a document with the state agency that outlines the initial statement required to form an LLC. While this document is called Article of Organization in some states, it is known as a certificate of information in other states. To establish an LLC as a legal entity, you need to prepare an Article of Organization which must include information such as your business name; the address of your principal place of business; your business purpose; how your LLC will be managed; the duration of the LLC; and the contact information of the registered agent. Each state has its own specific requirements when it comes to preparing and filing the LLC Article of organization. For example, if you are in New York or Nebraska, you will be required to publish a notice in the newspaper, announcing your desire to start an LLC.
- File the Article of Organization
After preparing your Article of Organization, you will have to review it carefully before submitting it to your state. You will probably incur a filing fee whose amount varies from state to state. Once your formation documents are reviewed and approved, you will then be issued a certificate, indicating that your LLC is formally registered.
- Create an opening agreement
An operating agreement is a document with details about all the rights of the members of the LLC, from their financial to legal and managerial rights. This document may also include details about how to distribute profits, how members leave the LLC and who contribute capital to the business. Although many states do not require this document, it is still important to craft it so that all members can be duly informed of their full rights.