Facts About Setting Up a Limited Liability Corporation
A limited liability corporation (LLC) is a unique business structure that provides protection from personal liabilities and gives the tax advantages of a partnership. It has become very popular in recent years for small business that want to incorporate. Each state has its own specific requirements and setting up a limited liability corporation is quite simple and can be done in very little time and with minimal effort.
The very first thing you must do is to get a copy of your own state’s LLC Articles of Organization form. This form is available from the office of the Secretary of State and must be filled out completely with such things as business name, business purpose, office address, and names of initial members of the LLC. (Naming your business requires that you comply with all state rules so ask for a copy of your state’s rules for LLC business names.) In addition, ask if you must post a notice of your intentions to form an LLC in the local newspaper. If so, it’s a good idea to publish it before you file your LLC Articles of Organization form.
The next step is to submit your LLC Articles of Organization form to your Secretary of State. You also must enclose the appropriate filing fee which can range from $40 to $900. A few states also charge a corporate tax that must also be paid at the time of filing. Check with your Secretary of State to find out if you must pay this additional tax and to determine how much it will be.
Once you have completed the steps listed above, you will need to create an LLC Operating Agreement. This is especially important if you are not the sole owner of the business. This agreement documents, in detail, all of the financial and management rights and responsibilities specific to members of the LLC. Basically, putting this information in writing prevents any future complications down the road. It’s a good idea to write the LLC Operating Agreement before filing the LLC Articles of Organization form so that everyone knows, up front, what they’re signing up for.
Setting up a limited liability corporation can be done on your own or under the advice of an attorney. Each state has its own unique rules and regulations so consulting with an attorney and/or researching the internet beforehand will answer many of the questions you may have about incorporating in your own state.