If you’re interested in learning how to form an LLC, there is so much information you need to know before you get started. In the last post, we discussed the first three major steps of how to create an LLC. But, there are a few more important steps that anyone who wants to form LLCs. Here are the next steps to start an LLC.
Choose How to Organize
After you’ve selected a registered agent to become the recipient of all legal paperwork and forms, it’s time for the actual structuring and organization of your LLC. The complexity of this process can become confusing easily, so many people choose to hire an outside attorney or LLC organization service to do the legwork. This is often the best way to assure that your LLC has maximum protection. If you feel as though you’re equipped with the knowledge to organize it yourself, you can save some money, but know that it could cost you later if you made any errors in the process that lead to loss of protection. If you have any doubts at all, it’s best to leave the organization process to a professional.
Discuss and Organize Ownership
To create an LLC, you should know that shares of LLCs are divided into what are called ‘units’. Units usually serve as percentages and can be distributed in many different ways. But it’s important to know that majority voting power overrides majority shareholding when it comes to who has the final say in making decisions. Ultimately, members of LLCs will never have to give away their voting power. They will always have the authority and control over the LLC. You should also keep in mind that the IRS automatically classifies an LLC as a partnership or “disregarded entity,” depending on if there is one or more than one owner.
Organize Final Checklist
Despite all the prep work involved, your LLC won’t actually become legal until every document and piece of information has been determined and discussed. The final write-up, which normally averages about one page in length, should clearly state the following information: The LLC’s name, the name and address of the registered agent, a purpose statement, and other information that is optional.
Ultimately, these are the basic steps of how to form LLCs. For more information about how to create an LLC, contact MyUSACorporation.
If you’re interested in learning about how to start an LLC, especially starting an LLC online, then there is a lot of information you need to know. Although each state has slightly different rules about taxation and filing, LLCs in all 50 states operate under many of the same broad principles.
In part one of this series on creating your first LLC, we’ll cover three of the most important first steps you’ll need to take. Keep reading for some universal steps to create an LLC.
Steps To Form LLC:
Decide Where to Register
Many people are surprised to learn that they can start a limited liability company in Delaware even if they live on the other side of the country. Deciding where you want to register your business venture can be difficult, but it’s a critical step to form LLCs. The main factors you should consider are state filing fees, annual fees, and other potential tax advantages that are specific to each state. Keep in mind that three states — New York, Arizona, and Nebraska — require that the formation of an LLC be announced in a newspaper. This is called “publication.”
Choose a Name
Picking a name for your LLC can be harder than it seems. Unfortunately, it’s not as fun or as simple as choosing a band name. There are three basic rules an LLC name needs to follow. It must be different from an existing LLC in the same state, it must indicate that it is an LLC, and it must not include words restricted by the state. The benefit of choosing a name, however, is that you have the freedom to use a trade name (a ‘doing business as’ name) that’s different from your legal operating name. This is useful when you need to shorten names so that they stick easier in customers’ minds.
Pick A ‘Registered Agent’
This is one step of the process to form LLCs that many people forget about or simply aren’t aware of. When learning how to form an LLC, one critical step is knowing that a registered agent is the designated receiver of legal paperwork and documents for the company. You can change the registered agent at your discretion, but it is a public record. If you would rather remain anonymous, it’s advised to hire a professional to take on the role on your behalf.
Ultimately, these are just the three first steps of forming an LLC, whether you’re filing paperwork in Arizona or Wyoming. In the next post, the rest of the process will be discussed. For more information about how to form LLCs online, contact MyUSACorporation.
Decades ago, the words “Start LLC Online” would have sounded like total gibberish. Starting a full-fledged business, online, without a physical presence in the world save for a few employees scattered around the country? Maybe even the world? You can’t form an LLC, form a corporation, or run a business like that!
Or, that’s what you would have said a few decades ago, at least.
Yet today, a simple Google search of the phrase “Start LLC Online” instantly provides more than 125,000,000 results. That’s a lot of information about forming a company on the internet. But how does one do that? How do you start an LLC online without running afoul of the taxman?
It’s actually really, really easy, but here are some questions you have to ask before you start:
What Will The Name Be?
Choosing the right name for your company can be hard, especially if you’re looking for that perfect name that fits just right. If there’s no pressure, take your time and think about what it is you’ll be doing, and what legal requirements that name satisfies. Every state has its own legal requirements when planning the name of an LLC, and you must be sure that those requirements are met. Thankfully, you can change the name of the LLC later in your company’s life, as long as the name change is done legally. Every state has its own process of how this is done, so be sure to do your homework. However, don’t wait too long. If you’re trying to get one of those hip, four- or five-letter names like so many Silicon Valley startups, then you’ll have to act fast before all the good LLC names are taken.
Who Owns It?
Will you have investors? Are you the sole owner? Are you the one elected by the future members of the LLC to be the leader? Who’s the person in charge of the company? Is it an individual or a board? As you can see, the question “Who owns it?” isn’t quite so simple. Once the status of leadership is confirmed, it should be written in an operating agreement so everyone has a clear understanding of their rights (and liabilities!).
Do I Have an Accountant?
All businesses should have an accountant, at least on retainer, so that they have someone they can turn to for their tax needs. Your accountant and tax adviser can help you get your company’s tax identification number, set up a company bank account, and ensure you do everything by the book. If this is your first time forming a corporation or LLC, they can also show you how to best keep financial records. This will make your life much simpler when tax day rolls around.
Those are just some basic questions to ask yourself when you’re deciding whether to create an LLC online. There are plenty more tips around the web, and you should always do your research ahead of time. If you want to learn how to start an LLC online, form a corporation, or incorporate in a particular state, contact us for more information!