LLC Business Filings

by Jeff Franco J.D./M.A./M.B.A.

Forming and operating a business using the limited liability company business structure requires minimal document filings. The requirements across all jurisdictions are fairly uniform given the widespread adoption of the Revised Uniform Limited Liability Company Act. However, you must comply with the specific filing requirements of the jurisdiction that governs your LLC.

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Certificate of Organization

The most vital document you must file to create an LLC is the certificate of organization. The certificate must include the name of the LLC, the address of its principal place of business, and the name and address of the agent who the LLC authorizes to accept legal service of process on its behalf. When choosing a business name, conduct a thorough search through your jurisdiction’s database to ensure the name is available. Most jurisdictions have a secretary of state office or its equivalent where you must deliver the certificate. Legal formation occurs at the time the office files the certificate of organization.

Certificate of Authority

LLCs involved in interstate commerce may file a certificate of authority in each jurisdiction it conducts business in. Filing the certificate is not required to do business in the foreign jurisdiction; however, it ensures that the LLC has access to that jurisdiction’s courts in the event of a business dispute. Having access to various state courts can reduce the LLC's risk when acting as a plaintiff, since the courts of your home state may not always have jurisdiction over a particular defendant.

Dissolutions

The dissolution of an LLC requires the members to wind up the business and cease all business activities. In the absence of fraudulent and criminal activity, the state will not terminate the LLC's existence unless members voluntarily agree to do so. However, most jurisdictions allow the LLC to formalize its dissolution by filing a statement in the appropriate office declaring the effective date of the dissolution. Voluntary dissolution requires a unanimous vote of all existing members to close the business entity. If an operating agreement provides alternative circumstances in which dissolution may occur, the agreement is binding and a unanimous vote is unnecessary.

Tax Reporting

The IRS imposes its own filing requirements on LLCs and its members. When you create an LLC, the federal tax law automatically designates it as a partnership or as sole proprietorship if only one member exists. If partnership treatment prevails, the LLC must file an annual informational tax return on IRS Form 1065. Additionally, the LLC must report each member’s allocation of business income on separate Schedule K-1s. Members are solely responsible for reporting their respective share of business earnings on a personal tax return and paying the tax. As a sole proprietor, the IRS requires you to complete the Schedule C attachment to IRS Form 1040. The Schedule C separately calculates the net taxable income that relates solely to LLC business operations. Alternatively, any LLC may elect corporate tax treatment which makes it solely responsible for filing the annual IRS Form 1120 and remitting income tax payments.