Steps to Starting an LLC

By Maggie Lourdes

A limited liability company (LLC) is a business that is owned and usually operated by its members. An LLC shields its members from personal liability. This means company debts do not generally put the members' personal wealth at risk. An LLC may own, buy or sell assets, enter contracts, file and defend lawsuits, hire employees and file tax returns. Limited liability companies are subject to the individual laws for the states in which they do business.

A limited liability company (LLC) is a business that is owned and usually operated by its members. An LLC shields its members from personal liability. This means company debts do not generally put the members' personal wealth at risk. An LLC may own, buy or sell assets, enter contracts, file and defend lawsuits, hire employees and file tax returns. Limited liability companies are subject to the individual laws for the states in which they do business.

Names and States

Individuals forming a limited liability company (LLC) begin by choosing a state in which to create the company. The LLC may not use the same name as another registered business in the state. A name availability search may be conducted by phone, in person or online through the state office that governs business entity formations. Many states designate the secretary of state's office to handle name checks and LLC formations. However, your state may appoint a different business division to handle these tasks.

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Articles of Organization

Articles of organization must be filed in the appropriate state office to form a valid LLC. Blank articles-of-incorporation forms are available at official state websites or in person at the appropriate state offices. Information such as the company name, address, business purpose and members' names must be included in the articles. An online legal service can help ensure articles are correctly completed and filed.

Resident Agents

A resident agent must also be identified. This is a person or corporation appointed to accept process service for the LLC if it is sued. The resident agent generally must have an address within the state in which the LLC is registered. Once a resident agent is chosen, the completed articles with the state filing fee can be submitted for registration.

Operating Agreements

Operating agreements may be required for a valid LLC. Even if an operating agreement is not legally required it is wise to consider having one. Operating agreements lay out the terms for business operations between members. They address issues such as profit splits, capital contributions, voting rights and dissolution. A comprehensive operating agreement can avoid disputes between members and save unnecessary costs and legal fees.

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What Is an LLC License?

References

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How to Create an LLC Online

Compared to other types of business entities, limited liability companies, or LLCs, are relatively new structures. LLCs are regulated by state limited liability acts. As of 2010, some state acts are less than 20 years old. Many states such as Missouri, Oklahoma, Wisconsin and others have a streamlined registration process for LLCs including the ability to form an LLC online without ever having to fax, mail or hand-deliver any paperwork.

Steps to Creating an LLC

Before creating a limited liability company for your business, you need to decide which jurisdiction to create it in. Every state and the District of Columbia establishes its own laws that govern LLC formation requirements. However, the process tends to be similar across jurisdictions.

How to Set Up an LLC in North Carolina

A limited liability company, or LLC, is a hybrid form of business association that combines the limited liability of a corporation with the pass-through taxation and reduced annual filing requirements of a partnership. A North Carolina LLC can be a highly beneficial method of organizing a new small business in that state. To form an LLC in North Carolina, you must file a document, called an articles of organization, with the North Carolina secretary of state.

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