As previously discussed, not a whole lot is necessary for an LLC formation. However, that doesn’t mean that you don’t need to be prepared! Make sure you have the following ready when you are forming an LLC:
- 1) Business Name – First and foremost, you need to come up with a business name. Naming your business is the first and really one of the most important steps in the LLC formation. That name is going to be connected to your business, your brand and your image. This can be pretty difficult, especially when there are many members who must all agree on what the business should be named. It’s best to come up with different ideas as you cannot use a name that has already been registered as the business name must be available. Also, remember that many states require the use of “LLC” or “Limited Liability Co.” as part of the name. It also can’t infringe or violate any trademark rights of other companies.
- 2) Registration – Once an available name has been picked, its time to register the LLC. The LLC office is typically combined with the corporations division of the Secretary of State.
- 3) Articles of Incorporation – The Articles of Incorporation is a very simple and basic document. It usually is nothing more than filling in the blanks of a form which has the elements discussed previously: name, address, registered agent and the name of its members.
- 4) Operating Agreement – Again, while not usually necessary, an operating agreement will help tremendously in setting out the framework for your LLC. The more detailed the better so there can be no questions as to important things such as members’ rights and responsibilities, how profits and losses will be allocated, management of the LLC, percentage interests in the business, etc. These are all things you will be happy you detailed out later on.
- 5) Licenses and Permits – While the filing of the above elements is what goes in to the LLC formation, you will still need to get licenses and permits before you officially start doing business. These will vary from state to state and depending on what your business does. One of the licenses that you will probably will have to obtain during an LLC formation is a business license as well as a federal employer identification number (“FEI”).