Do it Yourself LLC

By Harper Jones

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.

Filing Articles

To become a legally recognized entity, every state requires that an LLC must file a document, usually called Articles of Organization, with an appropriate state government agency office. As of November 2010, filing fees range from $30 to 200, depending on the state, according to the "Wall Street Journal." Articles of Organization ask you to identify the name of the LLC, which must be original and unused in the state of incorporation. The Articles will also ask for the name of the agent, or a resident in the state of incorporation, who will receive all correspondence for the LLC. The agent need not be a member of the LLC.

Beginning the Business

While most states do not require that LLCs have operating agreements, most LLCs create operating agreements anyway. An operating agreement is a legally binding document that establishes the business and financial responsibilities of each member of the LLC to other members and the LLC itself. If an LLC does not have an operating agreement, the LLC must defer to default state statutory laws. Many states have specific requirements should an operating agreement be created, such as the Arkansas law that requires this agreement to be in writing.

Ready to start your LLC? Start an LLC Online Now

Taxes and the IRS

Every LLC must file for and receive an EIN, or employee identification number, from the Internal Revenue Service, or IRS. Without an EIN, it is impossible to open a bank account or hire legitimate employees. The employee identification number application is free, and the application process can be completed online (see Resources).

Documentation Upkeep

Most states do not require annual dues or documentation from LLCs, according to the "Wall Street Journal." Because of the less stringent paperwork requirements for LLCs, many LLCs are remiss in their documentation protocols. However, should an external audit occur, LLC status can be challenged if improper or incomplete paperwork and records are discovered.

Ready to start your LLC? Start an LLC Online Now
Incorporating Vs. LLC



Related articles

What Are the Tax Advantages of LLCs?

A limited liability company, or LLC, is a business entity that has the advantage of offering personal liability protection for its members: LLC members cannot be held personally liable for the debts or obligations of the company. LLCs are also attractive to new business owners because LLCs enjoy many tax advantages as compared to other entities such as corporations and partnerships.

How to Reinstate Articles of Incorporation in Ohio

In Ohio, a corporation must comply with registration, reporting and tax requirements prescribed by law to maintain its business registration in good standing. The business division of the Ohio secretary of state's office is responsible for monitoring corporate compliance with these requirements. If your corporation fails to file a report, pay state taxes or maintain current information on file with the state, the secretary's office will cancel your corporation's articles of incorporation. Once your company's articles are canceled, it no longer has a license to transact business in the state. You must fix the problem and request that the articles be reinstated before you can conduct business again in the state.

Regulations for a Single-Member LLC in Virginia

For an individual starting a business in Virginia, it is important to understand the regulations concerning limited liability companies before committing to the business structure. The state regulations for single-member LLCs are the same as those pertaining to multi-member LLCs. However, owners should be especially cautious about actions that may lead to personal liability for the business.

LLCs, Corporations, Patents, Attorney Help LLCs

Related articles

How to Change an LLC Filing as an S Corp to a Sole Proprietor

A limited liability company, or LLC, is a business structure defined by state law which protects its members from ...

How to Re-Open a Dissolved Company

In theory, corporations can exist forever, but they can also go out of business or be dissolved for other reasons. For ...

Does an LLC Have Articles of Incorporation?

A limited liability company, or LLC, is not an incorporation, hence it would be inappropriate to call its organizing ...

What Is a Disadvantage of the Corporate Form of Business Entity?

Compared to other business entities, corporations offer many advantages, such as liability protection and ease of ...

Browse by category
Ready to Begin? GET STARTED