What Documents Do You Need for a Limited Liability Company?

By Harper Jones

LLCs, or limited liability companies, are small business structures provided for by state law. In most states, an LLC is a legal entity that's separate from its members, giving members limited liability for the LLC's debts. Each state has different laws regarding what paperwork and fees an LLC must file to be legally recognized in the state; however, each state requires that an LLC file an Articles of Organization to be legally recognized as a business.

Articles of Organization

An Article of Organization is a form or several forms, generally provided by the state, in which the LLC is formed and organized. The Articles of Organization must state the LLC's name and address, purpose and duration of business, and the LLC's registered agent. The LLC's name must be completely original in the state of incorporation -- no two LLC names are allowed to be the same, or sometimes even similar. The registered agent must be a resident of the state of incorporation, although he does not need to be a member of the LLC. Only after the Articles of Organization document is filed is the LLC considered a legal business entity in the state of filing.

Employee Identification Number

Applying for an employee identification number, or EIN, through the Internal Revenue Service adds legitimacy to an LLC. Although an LLC may be a legal entity in the state of filing, it cannot hire employees or open a bank account until an application for an EIN has been filed and an EIN has been given to the LLC.

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Operating Agreement

Each state has varied laws regarding how an LLC is to be managed. However, a document known as an Operating Agreement, which the members of an LLC create together to determine how the business will be run, can often replace the default laws of the state. As of November 2010, an Operating Agreement is only required in a few states, including New York. Other states has varying laws regarding Operating Agreements. For instance, in several states, if an Operating Agreement is created, it must be in writing, while other states require them to be created only in specific circumstances, such as for LLCs with only one member. This document may be useful should an LLC need to produce proof of an Operating Agreement for legal or business purposes.

Filing

The Articles of Organization document must be filed with the Secretary of State in the state where the LLC is formed and organized. If the LLC operates in more than one state, one state must be chosen as the "domestic LLC" state -- generally the state where the LLC was formed and the registered agent is located. All other out-of-state offices of the LLC are identified as "foreign LLCs," or offices of an LLC in a state other than the state in which the LLC was formed and organized. EIN forms can be retreived from the IRS website, and need only be filed once (see Resources). Operating agreements are usually not filed with the state of incorporation, and should be kept, if created, with other important internal business documents.

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References

Resources

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New York LLC Requirements

A limited liability company, or LLC, is a common business structure with features of both corporations and partnerships. The owners of LLCs are members, not partners or shareholders, and as in corporations, they are generally not personally liable for the debts or obligations of the company. Since LLCs do not have to file taxes as a corporation, members can also report the company's losses and profits on their personal tax return, as in partnerships.

How to Set Up an LLC in Texas

A Texas LLC, or limited liability company, is created by filing a certificate of formation with the Secretary of State. Form 205, available on the Secretary of State’s website, meets the minimum requirements of Title 3, Chapter 101 of the Texas Business Organizations Code. The form can be mailed to the Secretary of State’s office in Austin, hand delivered or faxed. As of November 2010, the filing fee for the form is $300.

Do it Yourself LLC

A limited liability company, or LLC, is an organization run by a member or members. Unlike a corporation or partnership, members of an LLC have limited liability for the company's debts. An LLC can be created by filing a legal document, usually called Articles of Organization, with an appropriate state agency. Although it may sound simple to file one document, there are many legal intricacies of which you should be aware when endeavoring to start an LLC.

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