How to Set Up an LLC

How to Set Up an LLC

A Limited Liability Company is a small business or an organization that you may set up independently or with more members. Here is how to set up an LLC:

Finalize a Name for the Company

Depending on which state you're in, you can decide on a name for your business. According to the state laws, you can choose a name that a company hasn't used before. You may need to add LLC at the end of the name of your business, and some states might not allow you to use words that imply the nature of the business, such as banking or insurance. You can check available names on the state agency's website to check for those which can be kept

Choose a Registered Agent

The law in every state requires you to have a registered agent for your company or business. The agent will be the one who will handle all the legalities of the LLC. Once they receive all the legal documents, they will pass them on to the LLC.

Get a Copy of Your State's LLC Article of Organization Form

You will be required to file a document called an Article of Organization form or a Certificate of Formation. Depending on which state you're filing in, this form needs to be filed in by your state agency. This form is available on the website of your state agency.

Make Sure To Get All Your Required Documents Ready and File the Article of Organization Form

You need to prepare and submit a few documents along with your article of organization for them to be filed with the state agency. These are the following documents:

  • • Your business's name
  • • The address of your business
  • • Mention the purpose of your business
  • • Management details of your LLC
  • • Details of the registered agent (such as name, contact information, etc.)
  • • The duration of the LLC

Once all these documents are prepared, one or more of the business owners will need to sign the document, and then they need to be filed with the state agency. Some states may require a notice to be published in the news expressing your intention to open up a business.

Before filing the documents, you must ensure that all documents are correct and complete. A filing fee must be paid depending on which state you're in. Once your documents are approved, you will receive a certificate proving that your company is registered, and you may use this certificate to set up a company bank account and to receive a tax ID

Create an Operating Agreement

This document contains all the information regarding all the members of the LLC, such as their legal, financial, and management details. This will contain the business's key points, such as how the profits will be distributed, who will provide the capital, and how you can leave the business.

Some states don't require an operating agreement, but it is recommended to have one when you have more than one member in the business so that everyone is aware of their rights.

Finally, Keep Your LLC Active

Once the business is formed, it is equally important to maintain a good relationship with the state. You may need to update a report annually and pay an annual fee to the state.

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