What's In An LLC Formation Package?

Forming a company may seem overwhelming, especially for first-time entrepreneurs. But understanding the requirements and processes for registration with the state can prevent any issues and ensure compliance. DoMyLLC can help with a hassle free LLC formation package.

Understanding LLCs

One of the first decisions for an entrepreneur is choosing the business entity structure of the company. While there are a lot of types to choose from, among the most popular options for startups is a limited liability company (LLC).

The LLC is often described as a hybrid structure. That is because it combines the features of corporations and partnerships. Like a corporation, an LLC offers asset protection. That means the owners, who are called members, will not be personally responsible for the actions, debts, and obligations of the company. Even if the company ends up incurring debts or facing a lawsuit, it will not affect the personal assets of the members.

At the same time, an LLC’s default taxation treatment is similar to a partnership. It is a pass-through entity, which allows it to avoid double taxation. There is no need to file taxes at the corporate level. Instead, the members report business profits and losses in their individual tax returns.

Forming An LLC

A company needs to undergo a certain process to ensure the legality of its operations. That includes the application for organizing the company, review from the appropriate state agency, and the approval of the registration. Completing all of these gives a company the clearance to operate in the state.

The process, which depends on the state, comes with requirements. That is where an LLC formation package comes in. It includes all the necessary paperwork, information, and steps to formally register a business. It serves as a checklist.

Here is what a company needs to look for to ensure a complete LLC formation package:

• LLC Name – Most states require companies to ensure the distinguishability of their names. That means it has to be unique. It cannot be anything that is similar to another entity in the state. Additionally, it needs to have the phrase “Limited Liability Company” or any of its abbreviations. Companies cannot also use a name that could confuse them for a government agency. Some document filing organizations like DoMyLLC can include a business entity name search in its business filing package.
• Registered Agent – Most, if not all, states require business entities to appoint a registered agent. The agent will serve as the point of contact of the company and state for all official and legal paperwork. It can be an individual or a commercial registered agent willing to receive all business-related correspondence on behalf of the company. LLCs that work with DoMyLLC can choose to include registered agent services as part of the business formation package.Companies that appoint an individual have to make sure that the agent:
  • Is at least 18 years old
  • Is a resident of the state
  • Maintains a physical street address in the state
  • Is always available at the given address during regular business hours

For commercial registered agents, they have to be:

• • Authorized to transact in the state
  • Available in the registered office during regular business hours

Take note that some states may have additional requirements.

• Operating Agreement – In most cases, states do not require the submission of an operating agreement. However, it will be beneficial for LLCs to create this internal document. It will set out the duties, rights, and powers of the members, which can prevent any disagreements in the future. It will also contain details on how to run the LLC. Some companies include provisions on how to dissolve the business or transfer ownership. To reduce the hassle, LLCs can include this step in the formation package.
• Formal Paperwork – To formally register the company, an LLC has to file formal paperwork with the state. In most cases, this is known as Articles of Organization or Certificate of Formation. This document comes with a filing fee.The necessary information and cost of filing will depend on the state. Some states have free copies of the form, while others allow companies to draft their own document. Working with a third-party organization like DoMyLLC for a business formation package can streamline the process.
• Business Licenses And Permits – Depending on the industry a company is in, its activities, and the location of the primary place of business, it may be necessary to acquire certain licenses or permits. Some states have general business licenses, along with tax registrations. The best thing to do is to check county and state government agencies to ensure compliance.
• Employer Identification Number (EIN) – The idea behind the EIN is similar to a social security number. But instead of assigning it to an individual, it is given to business entities. The EIN is necessary for certain tax filings, hiring employees, and opening a business bank account. Some lenders may also ask for it. Getting an EIN is easy. A company can request one from the Internal Revenue Service (IRS). As an optional service that can be added to your package, DoMyLLC can provide an EIN.

Companies that want to register as LLCs need to ensure that they have a complete LLC formation package. Not only will it prevent any issues, but it will also allow for a smooth application process. It helps make sure that the registration will be successful and approved by the state in one try.

However, many entrepreneurs find it hard to keep track of all the requirements. Some may not be able to set aside time to take care of the multi-step business formation process. In such cases, the best solution is to get help from a seasoned third-party organization like DoMyLLC.

Our team of experts can handle the preparation and filing of paperwork. Additionally, companies can request personalized solutions to ensure that the business formation package suits their specific needs. We offer registered agent services as well. Companies that need assistance in ensuring compliance with ongoing obligations can also get help from DoMyLLC. Contact us now to find out more about our services.