A Limited Liability Company (LLC) is a fast growing business structure that provides limited liability to its owners. LLC formation is the important decision that you have made for your company and here are the steps that guides you with the procedure in this process.
How to form an LLC?
- Legal Name for your LLC: First step in LLC formation is choosing the name of your LLC and it needs to meet the state’s LLC division rules. The requirements differ from state to state but on the general note,
- The name that you are choosing can not be the same as another filed LLC.
The ending of the name should be accompanied with an LLC designator such as Ltd, LLC, etc.
- If certain words are prohibited in that particular state then you can not use those words for your LLC name.
- After finding a legal and available name for your LLC, you can get into the next step.
- Articles of Organisation: The second step in LLC formation is preparing and filing the articles of organisation with your state’s LLC filing office. Be familiar with the names “Certificate of organisation” and “Certificate of formation” as some states refer them in these names too. You can contact your state LLC office to get the specific requirements of the state.
- Filing fee: In this LLC formation, you need to pay a filing fee when you submit your articles of organisation. Most of the state demand only a moderate amount but expect a high price in few of the states such as California.
- Information needed for LLC formation: Articles of Organisation is a simple and short document that demands not much of time. As an LLC owner, you can do it by yourself or even approach a professional to handle this for you.
- Registered Agent: You need to designate a person as a registered agent in this LLC formation process. Usually, one of the LLC members is designated for this and he will be receiving legal papers in future involving any lawsuit of the LLC.
- LLC Operating Agreement: Though LLC Operating Agreement is not necessary for filing process in LLC formation, it is rarely required by State Law. Creating an Operating agreement is a better option as it sets out rules for the ownership and operation of the business.
- Notice Publication (restricted to few states only): Usually, LLC formation process doesn’t accompany notice publication but few states demand this procedure to be followed. You are required to publish a notice about forming of an LLC for several times and then submit an “Affidavit of Publication” to the LLC filing office.
- Licences and Permits: Congrats on your successful LLC formation journey since your LLC has become official now. But before you step into your business world, you need to get the licences and permits to operate your business.
These are top of the list requirements for an LLC formation. But remember that each state has its own version so you might experience some difference in the process and the information required.