In recent years, Limited Liability Company (LLC) has become the most famous legal structure for businesses especially small businesses looking for flexibility and personal protection for liability. Limited Liability Company provides limited liability, taxation, management, fewer hassles, flexibility in allocation, and pass-through taxation.
LLC is relatively easy to create and manage LLCs in most countries. However, it is essential to fill out the documents correctly and have an operating agreement that describes the rights and responsibilities of the members. The requirements for creating a Limited Liability Company vary from state to state. However, it is a simple process and can be completed in a couple of days, depending on the organizational structure.
Here is a step by step process to create a Limited Liability Company
- Select the name of your company
Remember that the rules regarding authorized names of a Limited Liability Company vary from country to country. When creating a Limited Liability Company, select a company name in compliance with the rules of the state for LLC names. The name must end with the designator of LLC, such as “Limited Liability Company” or “LLC” etc.
- Hire an agent
The agent works as a third party and sends and receives the required papers and forms on your behalf. These include official communication such as email as well as official filings. It is necessary to appoint a registered agent residing in your country of work.
- Post a notice in the local newspaper
Depending on your state and county requirements when creating a Limited Liability Company, you may need to post a notice in a local newspaper affirming that you are creating a Limited Liability Company.
- File LLC
For your Limited Liability Company to be official, you must provide formation documents to the state. These documents for filing the LLC are known as Articles of Organization. You may need a lawyer to help you in the process. You will get this form online from the website or the office of your secretary of state.
- Form an operating agreement
The operating agreement of your Limited Liability Company is a legal document that describes the roles of the members and the ownership structure of your company.
- Obtain your Employer Identification Number (EIN)
EIN is the social security number of a Limited Liability Company. It allows you to open bank accounts for your business and hire people. It is free and easy to obtain an employer identification number from a government agency.
- Set up your LLC
Unless you have a convincing reason, it is suitable for small businesses to locate in the country where they will do their business in the first place. It is wise to create a limited company in which you live today and think about change once you earn a lot of income.
Creating a Limited Liability Company is not a big success, but it is not easy either. Make sure you know all the main terms before you start your business. Understand the structure and its implications for maximizing your business success. For best LLC formation services, it is suggested to compare LegalZoom vs ZenBusiness and read ZenBusiness Review so that you can choose the best LLC service.