How to Create a Limited Liability Company

Form a limited liability company.

Instructions

Difficulty: Easy

1. Familiarize yourself with regulations governing the formation of limited liability companies in your state. The secretary of state's office generally will have information and the required forms.
2. Study the state requirements and make sure an LLC is the right structure for your company. In some states, LLCs can't engage in certain kinds of business such as banking, farming and insurance.
3. Obtain the appropriate registration forms and ask about fees you will be required to pay upon filing.
4. Draft articles of organization. Most states require that an LLC have at least two members at the time of organization.
5. Draft an operating agreement. This document spells out details regarding contributions, management, distributions, fiduciary responsibilities, dissolution and other key issues. Some states require that the operating agreement be put in writing.
6. Choose a name for the LLC.
7. File the required documents and pay the filing fee with a money order or certified check. Normally, you will want to file the operating agreement at the same time you file the articles of organization.
8. Await approval. If your application is rejected, you will receive a letter explaining the deficiencies. Correct them and refile.
9. Set up offices and designate a registered agent who will represent the company - after the LLC has been approved.

Tips & Warnings

• The owners of an LLC aren't personally liable for the firm's debts, and losses can be used as tax deductions.
• Don't file the articles of organization before the operating agreement has been signed, or your LLC might not be considered legitimate.
• Pay attention to state laws. In some states, LLCs are dissovled upon the death or resignation of one of the owners.