When you find yourself in the planning stages of forming a company, it can be an overwhelming consideration when the notions of documentation and assuring a leak-proof structure is in place. This is where the wonders of a limited liability company or LLC makes itself known. Not only streamlining and maintaining a sense of coverage for those involved with the company, but those also who form under an LLC structure have their own assets covered and liability taken into account.
As we say this, there are a great many of you that are still staggeringly confused as to the process of forming an LLC, let alone the benefits they bring.
The Steps To Forming An LLC
- The first step in any process in creating an LLC is to determine where you will be basing it, choosing the state is often overlooked as an important factor, but considering the minute changes in each state and territory, it’s not a quick decision to make.
- The second step in forming an LLC is to name the company, having a catchy name is tempting, but unwise if there is already a business operating in the state under the sane name. There are guidelines for each state entitling what can and cannot be included in the official name, so research is vital.
- Choosing a registered agent is the third step in forming an LLC, this will be someone who is responsible for receiving all important legal documentation on behalf of the company as a whole. Some have a look through the best llc services and hire one outright, some others use a colleague or trusted friend.
- Submitting and fling the Articles of Organization is the all important fourth step, some states will call it the Certificate of Organization or Certificate of Formation. Filing these documents with the state is vital for keeping the stability of your company in check for the future.
- The fifth step in forming an LLC is to create what is called an LLC operating agreement. This is less to do with the state and more to do with your business associates and partners in the venture. By ironing out the roles and signing all together, there is a better chance of stability and less murky waters down the line when the business begins taking off. It’s also helpful to have a little bit of transparency when it comes to payments etc.
- The final step in forming an LLC is to register for an EIN, otherwise known as an Employer Identification Number. This acts as a social security number for the company, being able to keep track of the financials and payments made for or on behalf of the company.
It certainly seems like a lot of work, and it’s quite true that there can be no room for error in any of these steps. If you have the adequate experience in the above fields then you may save a bit of money by doing it yourself. However, if you have a little doubt or want to focus elsewhere, hiring a service may be the way to go.