If you are thinking of starting your own limited liability company (LLC), you have to familiarize yourself with the processes and requirements. Your company will need certain legal documents to help in managing its operations and ensuring compliance with its obligations. To help you get started, we have come up with a list of the different types of LLC paperwork that you may have to prepare to prevent any issues in the future:
The first document you will need is a solid business plan. It will serve as a guide to what your company is all about. It will also help attract investors who may be interested in funding your startup. Here are three things you can include in your business plan:
- What is the problem that your company wants to solve?
- How will you solve the problem?
- Why is your company best suited to solve that specific problem?
You should also consider certain factors that can help structure the company.
- How will your LLC be managed?
- What are your products or services?
- How will you deliver your products or services?
- Do you have a sales and marketing strategy? What is it?
- What are the requirements for your operation?
- Who is your target market, and how will you reach them?
- What are the market risks that your company may face?
Formation Documents as Part of the LLC Paperwork
What makes an LLC attractive is that it offers liability protection for the assets of the owners and allows pass-through taxation. However, to maintain the limited liability protection, you have to make sure you accomplish all required legal documentation.
An important piece of LLC paperwork is the Articles or Certificate of Organization. You have to submit this document to the appropriate state agency for where you want to operate. Most states have readily available forms you can use. While the requirements may vary depending on the state, there are general elements you need to prepare. To learn more about filing an LLC, visit our state-specific pages.
- LLC name
- Purpose of the business
- Principal office address
- Name and address of your registered agent
- Management structure
- Duration of the company, if not eternal
The operating agreement is an internal document that you do not have to file with the state. While it is not a requirement, it is advisable to create one. This paperwork will specify the duties and rights of all the members as well as the distribution of profits and losses. It may also include details about voting rights, ownership percentages, protocols in case an owner dies or wants to leave, and how to dissolve the LLC. To ensure the validity of this document, all members have to sign it.
Employee Identification Number (EIN)
This number from the Internal Revenue Service (IRS) is like the Social Security Number of your company. You will need it for tax filings, hiring employees, and opening a business bank account. You can get one using a specific document known as IRS Form SS-4.
Buy and Sell Agreement
Change is natural when it comes to business relationships, so if you want to prepare for any possibility, it will be smart to have this type of LLC paperwork. It will help in determining the following:
- What will happen to the company in case you or other members want to retire or suddenly pass away?
- What will happen if a member becomes incapable of fulfilling their duties?
- What should you do if one or more members file personal bankruptcy?
- Will the heir of the involved member be the new member? Or will they be required to sell their share?
- For how much can a share be sold?
If you are planning on hiring employees, you may want to prepare this document in advance. It will prevent misunderstandings when it comes to employment terms. You may include the following information:
- Wages and compensation
- Duties and responsibilities
- Working hours
- Job title and description
- Non-solicit and non-compete clauses
- Notice period and termination
Non-Disclosure Agreement (NDA)
Having this document will help protect any proprietary information related to your business practices and intellectual property. You can create NDAs for employees, suppliers, and other business partners.
These types of LLC paperwork are only a few of the documents your company may need. Once you have fully understood the important legal documents you have to prepare, you can move on to the state registration process. DoMyLLC can help you prepare and file the formal paperwork to ensure compliance.