States allow several types of business structures, including limited liability companies, which limit the owner's personal liability for the business's obligations. When a business has a separate existence from its owner, as is the case with an LLC, it means that the business owner or an investor is much less likely to be held personally responsible for the debts of the business; however, you can only create an LLC through appropriate registration with the state. Thus, until the LLC's paperwork is properly filed, it does not legally exist.
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Legal Formation of an LLC
An LLC must be formed as authorized by the laws of its home state. State laws vary, but some states, like Texas and Colorado, allow the entity to set its own creation date within the limits prescribed by state law. Typically, an LLC becomes a legal entity as soon as its paperwork -- often called the articles of organization -- is properly filed and accepted by the appropriate state agency, like the office of the secretary of state. Business owners can choose another date, however, delaying the entity's creation -- by as much as 90 days in Texas. A delayed start date allows the business's owner to choose a particular date when his LLC comes into being. If no date is specified on the LLC's registration form, states generally make the LLC's registration effective as soon as the appropriate state agency accepts the forms for filing.