How to Set Up a Limited Liability Company (LLC) in the USA
In recent years, a limited liability company has become the most popular legal structure of establishing small businesses in the USA. Entrepreneurs in the USA seeking personal liability protection and flexibility are striving to register their businesses in this form. This article will explain how to launch an LLC. It is worth noting that the requirements vary from state to state. Nonetheless, that does not make any substantial changes in setting up an LCC in the USA. Therefore, regardless of the state you want to start up the LCC, here are the basics.
Get a Copy of LCC Articles of Organization Form
This is the first step in setting up an LCC in almost every state in the USA. Ideally, you can obtain this form online from the Secretary of State Website or Office in your state. It would also be prudent to ask about any other requirement of setting up an LLC in your state. For instance, some states may require you to post a notice of the establishment of the company in the newspaper.
Select a Name for Your Business
Before choosing a name for your business, it is vital to gather information about rules governing the selection of business names in your state. The name should comply with your state’s rules for LLC names. It would be best to know the prohibited and acceptable phrases while coming up with the business name. For instance, the name of the business must end with the LLC designator – ‘Ltd’.
Complete the LLC Articles of Organization Form
This is a simple process that involves notifying the state about the LLC. The form requires details of the company such as the name, purpose of the business, office address and address of the directors. Information about the registered agent who may be nominated to conduct any legal process on behalf of the company should be given. However, it is not necessary to specify ownership distribution or management structure.
Publish a Notice about the Formation of the Company
This may vary in different states. You may be required to publish a notice about starting the company in the Local Newspaper. It is imperative to research and know whether it is required in your state. Otherwise, there is no need to waste your money on the publication.
Submit the Articles of Organization Form
You should send the document to the secretary of state along with the appropriate filing fee. In most states, the fee range between $50 and $1000. Additionally, some states may have a corporate tax that should be paid together with the filing fee. For instance, California state has $70 filing fee and $800 minimum annual corporate tax.
Formulate the LLC Operating Agreement
The LLC operating agreement is a very essential company formation requirement. However, the operating agreement is not a requirement by the state. That implies that it can be created after the other legal filings. In case a person is the sole owner of the company, this may not be necessary. Nonetheless, it is okay to formulate the agreement to act as one of the guiding internal policies. It acts as a vital document spells out the financial and management roles of the LLC members. Moreover, it clarifies the procedure of profit sharing, especially because of the members who contribute capital or additional capital. Terms under which members of the LLC can leave the company are also made clear. Briefly, the document is a complete set of rules that govern the company.
Hire an Attorney
It will not harm to hire an attorney to help in complex legal activities for your small business. Going through all the above steps may prove too hard especially to beginners. However, that does not mean that you cannot do it by yourself and save a whole lot of finances. Most specialists recommend that hiring an attorney can come in handy to help in completing your legal requirements. Our experts are always ready to offer attorney’s advice.
Set up the LLC and start Doing Business
After getting everything in order, it is time to establish the LLC in the state you will principally be doing conducting business. At this time, you should have selected the state where you want to start the business. That is mostly to benefits from tax and organizational advantages of registering in certain states. If not sure of these benefits, you can engage your attorney or conduct research to obtain more satisfying facts. Starting the business may not be easy as said. One may face several challenges, particularly in the initial stages. Of course, this will require the formulation of more vast solutions to emerging problems to stay operational and competitive.
You can get in touch with us if you need more assistance with the steps involved in setting up a limited liability company.
