If you’re starting a business for the first time, forming a limited liability company (or LLC) is one way to begin your journey. LLCs are a necessity for larger companies, but even a small business owner/operator can benefit from the financial protections of being a single-member limited liability company. If you’re interested in LLC formation, there are six public documents you should prepare for your application.
IRS Form SS-4
IRS Form SS-4 is used by businesses to apply for an Employer Identification Number (EIN). An EIN is a 9-digit number that is used for tax filing and reporting purposes. This is the corporate equivalent of a social security number for formal recognition as an employer, which is a necessity for both you and your employees in order to properly file taxes.
Name Reservation Application (Optional)
Next, you will need to submit a reservation for your entity name. This is done with the Name Reservation Application that you will get from the state. Before filing, you will need to search the Secretary of State’s corporate database for the name. If the name you have chosen is not taken, you can file the name reservation application. If it is taken, you will have to select another name for your business.
Articles Of Organization
The Articles of Organization is a document that establishes the powers, duties, and obligations of your LLC at a state level. In some states, Articles of Organization are called the “Certificate of Organization” or the “Certificate of Formation.” The document typically includes:
● Business name
● Principal place of business
● Business purpose
● Management structure
● Registered Agent
You will obtain this form from the Secretary of State.
Your Operating Agreement is a detailed overview of your business. Also called a “Company Agreement,” it outlines the rights and responsibilities of the members of the business. Operating Agreements also define how profits will be shared. They can include:
● Member names and roles
● Process for adding and removing members
● Shares of ownership
● Distribution of profits and losses
● Compensation plans
This is an “internal document” and does not need to be filed with any state agency.
Initial & Annual Reports
The requirements that come along with initial and annual reports vary by state. Many states require an annual report documenting business activities for the year, and California, for instance, requires an LLC initial report as well. Other states like Pennsylvania require “decennial reports” every ten years to confirm that your business and name are still active.
Beyond filing with the IRS, you will need to file tax registrations with the state. Depending on the state, tax registrations may include:
● Business entity taxes
● Employer tax
● Use tax
● Sales tax
Contact the Secretary of State to learn what LLC tax filing documents you need.