A limited liability company also popularly known as an LLC is a very common business setup especially for young businesses. An LLC is established according to the laws of a state, which vary from on state to the other. However, a number of general requirements pertain to the formation of an LLC that are similar across all states.
Below are some general key issues that are involved when establishing a limited liability company:
1) Choosing The State Where You Wish To Establish The LLc
The very first thing persons wishing to organize an LLC should do is picking the specific state where they wish to set up the company. They should be familiar with that states legal requirements and rules that govern how the company is set up and run. If you want your LCC to operate in various states, then it should be registered in all the states you will be operating in. In order to save yourself a lot of hustles and fees, it is advisable to form an LLC in the state where it will be operating its business.
2) Choosing The Business Name Of The Company
The next key step involves choosing the business name of your LLC. There are however several rules and regulations that guides on how you should go about the naming. For example, the name you choose should always end with the name Limited Liability Company and the name should not be in use by any other active domestic or foreign LLC (a name search is done to establish this).
The name should not feature certain titles such as insurance company, bank, incorporation and trustee or any other term that is prohibited by the state. You also need to conduct a trademark search to make sure that you are not infringing on another entity’s trademark. When choosing a name, ensure that it will not limit the growth of your company by including the name of a town or area in it.
3) Prepare And File The Company’s Articles Of Organization.
A limited liability company is officially established when the owner/s make ready and file the company’s Articles of Organization with the states secretary. The Articles of organization should be simple and precise. They should clearly describe the purpose of the LLC and the necessary filing fee should be paid to the relevant authority.
4) Preparing The Company’s Operating Agreement
The operating agreement of a limited liability company sets out the owners of the company, the LLC financial management and all the other rights and responsibilities. The LLC operating agreement also addresses the capital contributions of the company owners and when they should be made, the penalties or remedies that apply when an owner fails to make their contribution and how the profits or losses will be shared amongst the owners.
The LLC operating agreement states whether any owner/s or company securities have any preference in sharing or when liquidating the LLC. The management of the company, the number of officers to be appointed, the voting rights and procedures, dissolution procedures, meetings procedures and regulations on the transfer of the company’s interests are also addressed in the operating agreement.
5) Acquiring The Employers Identification Number (EIN)
The EIN also known as the Federal Tax Identification Number is obtained from the state’s tax regulating body if the LCC intends to have any employees. The process is quite easy and you can apply for tax id online. If you are not sure about various aspects of online application, you can take professional services for it. You can apply for your tax id
6) Opening the LLC’s bank account
The limited liability company needs some capital from the owners in order to operate. When the capital is established, a bank account that is totally distinct from the company owners personal accounts should be opened. The name of the account should feature the LLC’s legal name. When opening the bank company’s bank account, the bank will most certainly ask for the filed Articles of Organization, the board’s resolution to open the bank account, the employer’s identification number and the nominated signatories to the account.
7) Acquiring The Mandatory Licenses
Every business is required to obtain certain mandatory licenses for it to operate according to its nature. You may also be required to obtain certain licenses depending on the city that your business is operating in. These licenses are very necessary so that you do not find yourselves contravening the states laws and regulations. For any issues, you can visit https://www.govdocfiling.com/ and find solutions to your doc filing and other processes to establish your LLC.