Are you planning to start your own business in the States? Then it is best to form an LLC. Let us explain why forming an LLC is better for you and your business; an LLC is a business structure that has both the benefits of a partnership or a sole ownership business and of a corporation. The limited liability companies are the most common type of business structure in America. LLCs are probably most popular for the benefits of flexibility they provide to the businesses. Learn more thoroughly about LLCs below:
What exactly is an LLC?
LLC or a Limited Liability Company is a specific type of private limited company that is particular to the United States of America. LLCs provide limited liability to its owner and sovereignty in many circumstances. An LLC combines the flow-through taxation of a partnership and sole proprietorship and the limited liability of a corporation. They are also very fitting for businesses with a single owner.
How can you form an LLC?
Forming limited liability companies are easier than what you may perceive. The best way to form it is by simply following all the procedures properly. We have explained simple steps to create an LLC below.
Choose a Name:
The basic step would be to name your business that is not already taken by any other organization in the state. To name your LLC, you have to follow the specific rules of your state. It is best to make sure that your company’s name is not similar to an existing trademarked company name. If it is similar to another company’s name then you will be violating the trademark act. And foremost your company’s name must contain the term LLC at the end of it.
Articles of Organization:
A limited liability company is organized and not ‘incorporated’, that is why its founding documents are articles of organization and not articles of incorporation. The articles of organization are initial statements that are officially required when forming an LLC. The documents required generally include; the LLCs name, the names and addresses of the members and other required information signed by them individually. After the completion of required documents, you will need to pay the filing fees for articles of organization which is around $100 but will vary from state to state.
A registered agent is a person that has the legal authority to receive all legal service of process, government forms and notices such as summons and legal complaints on your LLC’s behalf. Your designated registered agent must be in the state of your LLC and must have a physical street address.
An operating agreement is a set of rules and regulations for the operation and ownership of the business. An operating agreement is fundamental but not usually a required official document by the state. It is best to create an operating agreement for the benefit of your LLC. An operating agreement generally includes; Percentage interest of members, Rights and responsibilities of each member, Allocation of profit and loss among members, Rules and power of voting of the members, provisions governing the selling and buying of shares if a member wants to leave the business or by death or disability, etc.
Obtain License / Permit:
After completing the above steps (or a few others may be required as per your State’s law) your LLC will be registered with your State’s Office. Now, you’ll need different licenses and permits depending on the nature of your business to run your business smoothly in the State. The included licenses can be a business license, EIN number, zoning permits, seller’s permits, etc.
You can get help obtaining licenses and permits by relying on an attorney or a third-party company such as Gov Doc Filing.