One of the most popular legal structures for forming a business firm is the Limited Liability Company or LLC. Their flexible and protective structure is suitable for any kind of business entity and also it is considered as the best option if you want to start with low capitals. It is relatively easier as well as cheaper to form an LLC. Here are some simple steps on how to start an LLC within budget.
Steps towards starting your own LLC:
1. Name of the company
The first step to start with your company is to give it a name. You should keep the name of your company according to the guidelines and rules of your state’s secretary office. These rules can differ according to the different states so you should consult the office before finalizing the name.
You should always check if the name you want to keep does not match with any registered company in the LLC office. The name of your company should always end with one of these options, viz. LLC (Limited Liability Company), Limited Company, etc.
You will also need a domain for your business. Nowadays, every LLC needs a website to provide their efficient services. So, you have to make sure that the domain which you want is available or not. It is important to check at this stage because many people want the name of the firm in their domain so if the domain is not available you need to reconsider the names for your firm.
2. Registered Agent
You will need a registered agent for the procedures to complete the legal formation of the LLC. In several states, Secretary of State can be your statutory agent while in other states you may need the help of registered agents. If your state doesn’t provide any then you can also hire a highly qualified and experienced registered agent for your firm. Even if you are designating any registered agent, still the Secretary of State will be the first contact to that agent before they serve your LLC.
Whether appointed by Secretary of State or you, they will be helping you in every aspect for the formation of your company like documentation and preparation of all the legal papers. They will also provide essential and useful information at every step and also they will be helping you in all the matters of taxation and its reporting.
3. Filing the Articles of Organization
In some states, it is also known by the name of ‘certificate of formation’ which is the procedure of basic documentation required for the formation of a company.
For this step, you have to visit the office of State Division of Corporation of your state. They will ask for some documents like the name filing in which the name should contain the ‘LLC’. You should also have all other legal documents like for the country where you are going to establish your firm.
If this office is too far then you can also use other methods to send your document i.e. either by post or by an online portal. You also have to pay the fee for filing the application and the amount is different in every other state.
Apart from these, they will also help you in reducing the publication cost which you have to pay in one of the further procedures. Since they are registered and appointed only after the consideration of Secretary of State thus you can rely on them in terms of privacy if your company.
4. Publication Requirements
You have to publish the copy of Articles of Organization that you have prepared in the previous step, in at least two newspapers of your state. The number of newspapers may vary according to the different state’s rules and regulations.
This is an issue of the notice which dictates the formation of an LLC. Although, you can pick the newspapers as per your choice they should be approved by the clerk of Local County in which your LLC exists.
Make sure to receive the affidavit from the publication house in which you have got your articles published. You have to submit this affidavit with your Certificate of Publication to the Division of Corporation in your State’s Department.
5. Operating Agreement
When you are done with all the legal requirements and the filling procedure then your next step is operating the agreement. However, there is no compulsion of completing this procedure right after filing the documents, you can do it later. But if you have more than two owners then you can also consider a written application for the time you are not doing it.
Before you submit your operating agreement, give it a double check that it has all the details describing the absolute framework of management as well as the finance department. It should contain all the rights and rules for the members of your LLC. It should also include important details like ratio and time of the profit division or in what circumstances any member can leave the LLC.
6. Creating Employer Identification Number (EIN)
Also known as FTIN (Federal Tax Identification Number), it is a unique set of numbers which are used to identify any particular LLC. You can go to the office of IRS (Internal Revenue Services) or you can also get it online. This is available free of charge thus you don’t have to pay any service fee as you have paid in other procedures.
You will need your EIN number in every procedure after setting up your LLC like for paying taxes and its issues. You will also need it while opening the bank account of your LLC and also you will need it for hiring the employees.
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Advantages of a Limited Liability Company
- The best thing about LLC’s is that they do not need much effort to be maintained as you are not required to conduct annual meetings or assign a board.
- The LLC’s can be set up very quickly as the process is simple and one can complete the paperwork also with ease.
- You are the sole owner of the firm and hence all the liabilities and benefits belong to you.
So transform your dream into reality with starting your own LLC within the budget cost!