Forming an LLC is an extremely wise step when starting up a limited liability company, especially since it protects the owner against potential business-related litigations. The idea of forming an LLC might at first sound a bit daunting, but fortunately, all you need to know about how to form an llc can be found in this article. If you wish to learn more about how to form an llc, you can find many helpful articles and links in various internet directories. There are also publications that offer completely free educational resources on creating an LLC.
As previously mentioned, an LLC has many advantages over a sole proprietorship or corporation. The most obvious is the fact that the owner is protected by personal liability protection. If an employee or member of the business is sued for any reason, the owners are shielded from paying off any legal fees unless they prove that the suit is unwarranted. This means that if the lawsuit is baseless, the LLC can afford to pay legal fees without having to raise money from their own profits. This can be a major advantage for small businesses, as most small businesses don't have any reserve funds.
Forming an LLC requires the filing of an article of organization form with the secretary of state in the state where you wish to file your LLC. You will then need to submit this article to the office along with the other paperwork required to start your LLC. All of these procedures take about a week to complete. However, it's very important to remember that the filing of these documents is the beginning not the end of the process.
How to Form an LLC
If you wish to continue the process after you have filed your articles of organization and the form used to start your LLC, you will need to go through the same process. The filing of an Operating Agreement is the next step. This will outline the nature of your business and the powers that you have over it. You will also add in a notice of incorporation, commonly called a Notice of Non-Provisional Certification. This is not necessary, but it is recommended that you include one.
Next, you must file a certificate of authority with the secretary of state. This is typically done by completing a form known as a "statement of authority," which states the powers that you have over your business. You must also provide the filing officer with a copy of your operating agreement. The last thing you must do is submit a statutory notice of incorporation to the secretary of state. This is a document that officially starts the LLC process and describes who can actually perform the functions of your LLC (this would be your LLC's corporation or LLC).
After you have filed these documents, the next step is to set up the LLC. To do this, you must select a registered agent. A registered agent is an individual who is responsible for receiving all communication from your company and for forwarding it to the appropriate party. Another individual, your secretary of state, will serve as the company secretary. Keep in mind that you do not have to use a registered agent, and you can hire your own attorney if you prefer. Just remember to register any new officers that you incorporate.
Once you have chosen your registered agent and company secretary, you must get your books and records ready. These are important legal documents that need to be updated annually, so make sure you keep them current. Other important legal documents that you need to prepare are your IRS tax forms, your articles of organization, and your Operating Agreement.
After you have all of these documents, you're ready to start incorporating! Forming an LLC requires one final step: sending your articles of organization to the state Board of Equalization. Your registered agent should be able to help you with this process, too. Once all of the legal documents are in order, you're business will be well on its way to becoming a thriving new company!
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