How to File for an LLC

By William Pirraglia

Limited liability companies, or LLCs, are creatures of the state -- not the federal government. Therefore, specific steps or necessary documents may vary, depending on the state in which you base your new organization. However, the basic steps to create and file for an LLC should be similar for all U.S. jurisdictions. Understand that, for federal tax purposes, the U.S. government and Internal Revenue Service do not recognize LLCs as separate entities. Therefore, for IRS purposes, you must choose corporate, partnership or sole proprietorship tax treatment.

Step 1

Choose a unique name per your state's LLC regulations. You will not be permitted to use a "deceptively similar" name to another existing LLC. Your state will also prohibit you from using a similar name to an existing corporation,e.g., Microsoft, LLC. Most states will also not allow certain words in your legal name like bank, corporation and insurance.

Step 2

File all required documents, typically called "articles of organization," with the proper state agency -- usually your Secretary of State. Articles of organization are similar in content to the "articles of incorporation" required when forming a standard corporation. The form typically includes the LLC name and address, registered agent information, business "purpose" and management information that identify the person who will manage the new company.

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Step 3

Pay all required formation and registration fees. Most states have reasonable registration fees -- in the $100 to $200 range. However, a few states, like California, require much higher registration fees, often from $500 to $800. You will also face an annual renewal fee to keep your LLC in good standing and active with your state. Annual fees are usually similar to initial registration charges.

Step 4

Apply for all necessary licenses and permits required by your state or municipality. Registering your LLC and paying required fees without obtaining necessary licenses will prohibit your new LLC from opening its doors for business.

Step 5

Write an LLC "operating agreement." This document explains all of the rights and responsibilities of the LLC owners -- usually called "members" in an LLC -- like who will serve as a managing member responsible for the day-to-day management of the company. Operating agreements are seldom filed with your state, but they are necessary for smooth operations. You should state the percentage of ownership for each member, how you will allocate profits and losses, voting rights of members, schedules for meetings and how members can buy or sell ownership interests.

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What Is an LLC License?

A limited liability company is a type of business structure that shields the owners of the company from personal liability for the financial dealings of the operation. An LLC does not pay federal taxes since the profits are only reported on the owner's tax return as personal income. The creation of an LLC is governed by state law and members must file certain documents with the appropriate state department to gain approval to operate as an LLC.

How Do I Become Incorporated in California?

You incorporate a business in California by filing articles of incorporation with the secretary of state. You can incorporate by yourself or with others. California law has basic requirements that apply to all corporations, such as adopting bylaws and appointing officers and directors. After incorporating, additional state filings are required to keep your corporation in good standing.

How to Cancel an Incorporation

When a business incorporates, it becomes a distinct legal entity. The corporation’s liabilities are its own; its shareholders are generally not personally responsible for those obligations. The incorporation is also required to file its own tax returns. Due to its legal independence, cancelling corporate status requires filing documents with a number of organizations. Businesses incorporate under state law, so the specific steps for dissolving the organization will vary. Check the laws of the state where the business is incorporated for the exact process your corporation will have to follow.

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