Forming a Limited Liability Company (LLC) comes with multiple benefits. If you already have decided to form an LLC, here are the steps that you should follow in order to establish it properly:
Selecting the name of your LLC
This is the most basic step as by law, no two companies can have the same name in the same state. Thus, you should first do a search to find out whether the name you intend to adopt has ever been registered with your state’s LLC office, which is also the office of the Secretary of State. The name of your business has to end with LLC, Ltd. Liability Co or L.L.C. If you do not know how to find out whether that name is available, you can as for assistance from the LLC office in your state. If the name you want is available, you can then reserve it for a small fee until such a time, as you will file your articles of organization.
As you seek to choose a name for your business, you will want to make sure it is legal. This means making sure that you do not use the words that are restricted in your state. Such include words like insurance, bank and others. You can find out the restricted words and phrases in the state from the LLC office or from the Department of State.
File your Articles of Organization
When founding your LLC, you have to file the Articles of Organization with the LLC office in your state. You can do this immediately after you find out whether your name is available, or you can reserve the name and file your articles of organization later. Articles of Organization are documents that contain certain information for your business as may be required in your state. You will be required to provide the name of your LLC, the address and the names of the LLC owners who may also be referred to as members.
You must also include the name and address of your registered agent, statement of purpose, details about the management (that is, whether the members will be the managers or they appoint a manager). You can also include the duration – time that you expect the LLC to be in business.
In some states, you will find that the articles of organization are referred to as certificate of information. Specifically, this is used in New Hampshire, Washington, Delaware, New Jersey and Mississippi states while in others like Pennsylvania and Massachusetts refer to it as a certificate of organization. Only after you file this information with your state can your LLC be considered as a business in that state.
LLC Operating Agreement
An LLC operating agreement is just that, a document with by laws that will be used to govern the company. They include things like how much percentage of the LLC each member owns, the rights of the members, the responsibilities of the members and the details for voting. It also includes information about how profits and losses will be shared among all the members.
Publish A Notice
To publish a notice after registering your LLC means to make your LLC official by publishing a notice in the local daily to the effect that you aim to establish and LLC. However, please note that this is not a requirement in all states, but it is required in New York and Arizona.
Get the required permits and licenses
After publishing a notice if it is applicable in your state and you have created an LLC agreement, you need to get all the required permits and licenses in your state before you can start operations. A sellers permit is required for a business that is going to sell products while a business license is required for any LLC. There are different permits and licenses for different LLCs.
Retaining your limited liability
You will have to make deliberate effort to ensure that your LLC maintains the status of a separate business entity. One of the things to do is to keep clear and well-documented records of all financial activities/transactions. It also includes taking down minutes of all main decisions, and making sure that all members meet their responsibilities.
Conclusion
Apart from these steps, you need to collect and submit an LLC tax form for your company. The good news is you can easily submit your federal tax ID application online. So, follow the above-mentioned steps to form an LLC and also submit application for your federal tax ID number and get all the advantages of running an LLC.
Be the first to comment