Starting a business as a limited liability company (LLC) comes with many benefits. Not only does it offer asset protection to the owners, but it also allows flexibility in management and taxation. However, it requires the proper completion of a state business formation process and LLC paperwork.
How To Form an LLC
Generally, forming an LLC is a lot easier than what some people think. While the process may vary depending on the state where the company decides to register, there are basic steps that are required in all states. Among those are the preparation and filing of the appropriate LLC paperwork.
Why LLC Paperwork Is Important
In most states, the LLC paperwork is known as the Articles of Organization. Some call it the Certificate of Formation. This documentation will formally register the company with the state and legalize its business operations.
The laws governing business entities in a state are there to protect consumers and residents. That is why a company has to comply with all state laws and requirements.
Things to Remember
LLCs can register to do business in any state that it deems best for its operations. It is important to understand the state’s requirements and complete the formal LLC paperwork.
Here are some pieces of information a company has to disclose when filling out the formation documents:
- LLC Name – The company’s name represents the business, so it has to be creative and appealing to the public. However, it is also crucial for it to comply with the naming regulations of the state. For instance, it should include a proper designator. This can be the phrase “Limited Liability Company” or any of its abbreviations like “LLC” or “L.L.C.”
Most states, if not all, also require a company name to be unique. If it has already been taken by a business entity in the state, then the LLC can not use it. A business entity search on the database of the governing agency can help ensure the availability of the desired name.
- Effective Date – In most cases, the LLC has to indicate the date the LLC will take effect if the company has a specific date in mind instead of when the state approves of the registration.
- Principal Office Address – The state should also know the physical street address of the business. If the mailing address is different, then the company may have to disclose it as well.
- Information About the Registered Agent – States require LLCs to nominate and maintain a registered agent. It is also necessary to inform the governing agency about the name and address of the company’s agent.
The agent can be an individual resident or an authorized third-party organization like DoMyLLC. They will serve as the point of contact between the company and the state. They should agree to receive services of process, legal mail, and government correspondence on behalf of the LLC. To know more about the qualifications per state, check out this article.
- Purpose of the Business – The Articles of Organization may also require a statement of purpose. This refers to the reason for forming an LLC. A general statement may suffice in a lot of states. It can be as broad as conducting business activities and operations that are legally permitted in the state. Mentioning this will also prevent unnecessary limitations on the LLC. However, if the state requires a specific purpose, then the LLC will have to simply state its primary activities.
- Management Structure – The LLC paperwork may require the company to state whether it will be a member-managed or manager-managed LLC.
- Names and Addresses of Members – Some states ask for a list of the names and addresses of the LLC owners, who are known as members.
Filing formal paperwork with the governing state agency comes with a corresponding fee. The amount will vary depending on the state.
Filling out LLC paperwork requires attention to detail. A company has to be careful not to make any mistakes to prevent issues from coming up. Doing so will also help ensure the approval of the governing state agency.
To help ensure compliance with all state requirements, it may be best for a company to get help from a business filing service provider like DoMyLLC. Our team of experts can handle the preparation and submission of the documents. We are also authorized to be a registered agent in all 50 states as well as the District of Columbia. Contact us now and request a personalized solution so you can get the exact service you need.