Limited Liability Companies, which in the United States are referred to as "Limited Liability Companies" ("LLCs") are popular business structures for corporations and individuals, due to their legal and tax benefits and protection against property liability that allow. LLCs are easy to set up, and while many lawyers, accountants, and a plethora of service firms can set it up for you, many of these service providers only complete the first part of the process, leaving the rest of the business to you. You can save money and frustration by simply setting up the company yourself. To do this, follow the steps mentioned below.
Steps
Step 1. Identify your state's LLC laws (the US is a federal state, and the laws differ from state to state)
To do this, follow these steps:
- Visit the Limited Liability Company Center website. The Center provides citation of each state law regarding LLCs. A citation consists of the title, chapter, and section of the law, used to locate the specific law within the larger state or federal code.
- Choose your state from the list of links and look for the citation of the laws of your states.
- Copy the quote and then launch a search for that text in your favorite search engine. For best results, put the quote in quotes, for example, “Ala. Code Ann. Tit. 10, ch. 12, §§ 1-6. " instead of Ala. Code Ann. Tit. 10, ch. 12, §§ 1-6.
Step 2. Decide in which state you will set up your LLC
Many business owners will need to set up their LLC in their home state, although some may set it up in any state of their choice. Follow these guidelines when deciding where to set up your LLC:
- Establish your LLC in your home state. If you live in the United States and will be doing business in your home state, experts recommend that you register your company there, since many state laws require that LLCs doing business within the state must register in that same state. Doing business generally means owning or leasing an office and having employees within the state. You can check your state's LLC laws to determine what is meant by "doing business", and whether you need to set up your company there.
- Establish your company in a different state than where you reside. If your company will carry out an internet business and you do not have a physical location in your state, you can consider the tax benefits of setting up the company in a state other than that of your residence. For more information on setting up companies in other states, and which states offer tax incentives, read Jennifer Reuting's article on choosing where to set up a company.
Step 3. Check state LLC laws for company name requirements and restrictions
Laws regarding the names of limited liability companies vary from state to state and requirements and restrictions may include:
- Whether the company name ends with the designation "Limited Liability Company", "Limited Company" or an abbreviation of either such as "LLC", "L. L. C." or "Ltd. Liability Co ".
- That the name is not the same as that of another company registered in the state.
- That the name does not include certain prohibited words such as "bank" "trust" or "insurance".
Step 4. Choose your company name
Choose a name for your LLC that complies with your state's limited liability company naming rules. The Nolo Law website recommends that your name:
- Be distinctive
- Be memorable
- Be easy to write and to pronounce
- Suggest the products or services you offer
- Set yourself apart from your competitors
Step 5. Check that the name you have chosen for your company is available
If you are planning to set up an LLC in one state and do business in another, you should check that the name is available in both states, as state law may require that you register your company in each state in. you do your business. The Limited Liability Company Center website offers links to search forms for each state, where you can check that your name is available
Step 6. Choose a registered attorney
A registered attorney, or trial attorney, is a person chosen to receive notifications of court documents in the event that your company becomes involved in a lawsuit. The prosecutor must be an adult resident in the state where you set up your company. You can appoint yourself, your own attorney as a registered attorney (be sure to ask him first) or hire an attorney to provide this service. To find national or local prosecutors, use your favorite search engine and type “process agent”. You may also want to check the office of the Secretary of State, as it sometimes keeps a register of individuals who perform the function of prosecutors. You can find your Secretary of State's website by following the appropriate link on the Travis Bowen Law Firm website.
Step 7. Submit your company charter
Many states allow businesses to submit their articles of incorporation online. Follow the instructions for setting up a new business on your Secretary of State's website. You can locate your Secretary of State's website by following the appropriate link on the Travis Bowen law firm website.
Step 8. Prepare a statute
A statute (operating agreement in English) is a contract between the members (partners) of the LLC and covers topics such as the initial shareholders and their respective shares in the company, rules on the distribution of dividends and losses among shareholders, voting rights, procedures for the admission of new members and withdrawal of current members and rules for members' meetings. See the statutes page of the [https://www.ilrg.com/forms/llc-opag-mem/us Internet Legal Research Group] site for a free statute form. Choose your state from the list of links.
Step 9. Obtain an Employer Identification Number (or “EIN” in English)
Unless the company has only one partner and you do not want to file your tax returns as an indistinct entity (i.e. including income and expenses in your personal tax return), you will need to obtain an EIN identification number. To get an EIN number online, visit the U. S. Revenue Agency's website (called the Internal Revenue Service or IRS) here. You will receive an EIN number immediately after applying online. For more information on EIN numbers see the IRS publication Understanding Your EIN.
Step 10. Submit IRS Form 8832, if required
LLCs are unincorporated entities, which are not recognized by the IRS for tax purposes. Therefore, all LLCs must choose whether to be classified as a corporation and therefore be taxed as such, or as an indistinct entity considered as non-existent for tax purposes. LLCs that have more than one partner cannot choose to be considered indistinct. If you do not submit Model 8832, your LLC will be classified as a corporation if it has more than one partner, and as an indistinct entity in the case of a sole shareholder. You can find Form 8832 on the IRS website.
