How to Form an LLC in Various States
LLC is the abbreviation for Limited Liability Company. Forming an LLC is not difficult. By forming an LLC instead of a corporation, you receive all of the benefits of having a corporation except the double taxation and excessive paperwork. An LLC also allows for multiple members and owners.
The following steps will walk you through the basic procedure. However, each state will vary when it comes to criteria and cost.
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Instructions
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How to Form an LLC in Various States
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Locate the state's LLC division and visit its official Web site. Most states will have this information categorized under "starting a business".
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Choose a business name. Each state will have specific rules regarding your LLC name. In general, your LLC name cannot be the same as another LLC on file. Your name must also end in LLC, L.L.C, or Ltd. Liability Limited Co. These are all abbreviations of Limited Liability Company. Finally, your name must not contain any words that are prohibited by the state. The rules regarding these prohibited words will vary by state. In addition to the state's rules and regulations, remember that you cannot choose a name that is trademarked. For example, you may want to check before starting a business called McDonalds. You can check for trademarks by visiting uspto.gov.
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File the paperwork. Most states will call this "articles of incorporation'" "certificate of formation," or "certificate of organization." Normally, these forms can be picked up from the LLC division location or by downloading it from the state's Web site. The documents are short and can be done in just a few minutes. Normally, you will only need to provide the LLC name, address, the name of the owners and the person in charge of handling legal documents. There is also a fee to file. This fee will vary by state, but will typically fall somewhere around $100.
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Create the operating agreement. The operating agreement does not need to be filed with your LLC forms. However, it is important to create one for your LLC. The operating agreement will set the rules of ownership and include such things like member percentages, member rights, management, voting policies, buying and selling provisions and any other clauses.
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Publish a legal notice of your intent to form an LLC, if required by your state. Contact your local newspaper for help. There will be a charge to run the notice.
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Before you can operate your LLC, you will need to have all appropriate permits and licenses. Check your state's regulations.
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Tips & Warnings
Forming an LLC is a simple process. However, you should always consider hiring an attorney when starting a new business.
