An LLC (Limited Liability Company) is one of the most sought out business structures by the American public. This hybrid business structure is a combination of sole proprietorship and corporation favored due to its high flexibility and liability protection.
By becoming a limited liability company, you allow your business to grow exponentially as you can gain the market’s interest and trust due to your company reaching a higher credibility status while also capitalizing on your income because it is tax-free. We hope that those facts piqued your interest! But wait, how does one become an LLC?
Without further ado, here are the main steps on how to form a limited liability company:
- Choose Your Company Name
The United States of America requires you to select a name that has not been used by other business entities and of course, includes the obvious abbreviations of a limited liability company, e.g., LLC, L.L.C., LC, L.C., or Ltd. We strongly suggest that you select a name that is memorable by your customers and is appropriate, as you will be referred to using the aforementioned trademark throughout the proceeding future, i.e., when clients are making payments to your bank account, contract signing, mentions by the media outlets, etc.
- File Your Certificate of Organization
This is a mandatory document that you will have to fill to be approved by the state for your LLC’s formation. Usually, it requires you to provide your LLC’s official name, the registered agent’s name along with the registered office’s address, and other basic information that you’ll have to complete in order for your application to be eligible. As each state’s requirements vary from one another, we advise you to review and understand those requirements before filling them.
- Appoint Your Registered Agent
A registered agent is an individual or entity that is responsible on behalf of the LLC should there be any legal action taken. Many commercial agent services will act as your LLC’s registered agent for a specific fee and are usually hired to do so. Nevertheless, the option to appoint your own LLC’s member is still viable should you wish for it.
- Complete the State’s Requirements
Depending on the state that your LLC is domiciled at, you may be required several mandatory documentations before you are permitted to operate, e.g., Business Licenses, Employer Identification Number, Sales and Employer Taxes, etc.
- Submit Your Annual Reports
An annual report or “annual renewal” is an online report located at the Secretary of the State’s web page that must be completed within 120 days of your LLC application. The average annual report fee ranges around $70-$80.
We genuinely hope that this article has been helpful in the process of your LLC’s formation!…Continue reading »