Limited Liability Company
A limited liability company or LLC is similar to a partnership but has legal protection of personal assets that’s why many small business owners set up a Limited Liability Company for the liability protection it provides. A Limited Liability Company exists separately from its owner, and therefore owner is not personally responsible for business liabilities. Limited Liability Company is generally easier to setup but exact rules for forming Limited Liability Company differ state by state.
How to apply for an LLC, you need to file a paper with the state where your business resides, every state has its own rules but there are some common steps you can follow to start your Limited Liability Company regardless of your state
Select a Name For LLC:
Your LLC name must be unique as most of the state doesn’t allow two different business entities to have the same name also there are some restricted words which cannot be used in the Limited Liability Company name like “bank”. Selecting the Limited Liability Company name is same as selecting user id for your email it should be unique, you can check that desired name is available or not online. First thing before filling for Limited Liability Company paperwork is to check that your desired name is available or not. You should select a unique name which reflects your business and avoids trademark infringement claims. You can also reserve the Limited Liability Company name if you are not going to file the paperwork right away but there are a name reservation fees you have to pay while reservation. This reservation filling fees, duration vary from state to state.
Choosing a Statutory Agent:
A statutory agent is a person who concedes to receive the lawsuit, official documents on behalf of Limited Liability Company and pass them to appropriate person or authority. Statutory agents age must be over 18 years and be a state resident also statutory agent must be the member of Limited Liability Company.
LLC Operational Agreement:
LLC operational agreement is the blueprint that defines how your Limited Liability Company will run. It specifies the right of members, how business is governed, voting rights, ownership interests. The important aspect of this agreement is that it isn’t filled with the state and may not be function according to state rules.Limited Liability Company operational agreement gives power to business owners to define their rights and responsibilities.
Paperwork With State:
Each state has its own set of rules and regulation for Limited Liability Company. In general, you must add these things in your article before filling.
- Name and Address of Limited Liability Company
- Duration of Existence
- Name and Address of Statutory Agent
- Purpose of Limited Liability Company
Certificate From State:
Once you filled the documents for Limited Liability Company formation, the state will check the documents in order to issue the certificate, this certificate validates the authority of your Limited Liability Company and you can use this certificate to obtain tax id number application and various business licenses further this certificate help owner to set up business bank accounts.
If your Limited Liability Company does business in multiple states, you may need to register to do business in other states, also for this you need to submit papers in each state where you want to do business in addition to this you need the statutory agent in each state. This allows Limited Liability Company to do business in more than one state.