How to Become a Limited Liability Company

by Anaid Heyd

    A Limited Liability Company, or LLC, is a company owned by one or more individuals with a unique protection of personal monetary assets. LLC owners can receive the benefits of a business partnership tax status, such as being taxed as a sole proprietor, yet have a limited liability toward the company's obligations and debts. In other words, an owner's personal assets are not pursued should the company be charged for failure to complete any obligations or debts.

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    Step 1

    Create a name for your Limited Liability Company and attach the "LLC" title to it. Variations of the title may include "Limited Liability Company," "L.L.C.," "LLC," "L.C." and "LC."

    Step 2

    Contact your local Department of State office to verify that the name of your LLC is not already taken by another business. LLC names may not have the same name as any corporation, LLC or limited partnership in that state.

    Step 3

    Determine a purpose for your LLC. The purpose will define your company and notify local government agencies of your intentions. Some states, such as Utah, require that an LLC dedicate itself to only one specific type of service. The statement of purpose will be required on your application to the Secretary of State office.

    Step 4

    Obtain an LLC application packet, if available, from your local Secretary of State office. The packet will allow you to create an organized Articles of Incorporation in a facilitated manner. The Articles of Incorporation may also be known as Articles of Organization or Articles of Formation. Regardless, these are a detailed listing of your LLC that informs government agencies and the public of your company's purpose and overall organization, and also determine who is in charge of the company. Some states have a fill-in application to help LLCs with the process. However, companies can also draft their own.

    Step 5

    Hire an attorney to help draft customized Articles of Incorporation, if the task becomes too daunting. Though Articles of Incorporation can be drafted by anyone, attorneys may help sort complicated matters. Such matters may include defining ownership responsibilities, line of succession, voting rights and profit shares.

    Step 6

    Research any state-specific requirements for starting a limited liability company in your area. While starting an LLC is generally the same nationwide, regulations may vary from state to state. Regulations will specify what type of fees you will be required to pay and any subsequent actions required, such as providing additional documentation or publishing a notice in your local newspaper. New York, for example, requires that owners publish a notice of formation in the local newspaper for a period of six consecutive weeks. Access such information at a local Secretary of State office or their website.

    Step 7

    Call your local Secretary of State office to verify the total amount of fees you are required to pay upon filing. Also inquire about what methods of payment are available or allowed. For example, some states, such as Maryland, require all hand-delivered applications to include payment by check only.

    Tips & Warnings

    • Research what states you would like to file in. Delaware and Nevada are popular locations for LLCs. As of November 2010, Delaware charges franchise taxes at a flat rate, and Nevada does not charge LLCs a corporate income tax.
    • Apart from filing fees, consider what types of taxes your LLC will be required to pay.

    About the Author

    Based in El Paso, Texas, Anaid Heyd has been writing research articles since 2001. Her work has been published in the "American University Law Review." She has bachelor's degrees in political science and Chicano studies from the University of Texas at El Paso and is currently in law school at American University.

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