When you’re starting a business, one key decision you have to make is what type of entity you want to use. Because of the division between your personal assets and the company, you might decide to form a limited liability company, which is commonly known as an LLC.
If you want to establish an LLC, you have to ensure that you’ve considered some key points. Being prepared to handle these points ahead of time can help reduce the stress and make the entire process easier.
Once you decide on the state where you’ll establish the LLC, you need to determine what you’re going to name it. The name can’t be the same as another entity, and it can’t be so close to another name that it could cause confusion. Typically, it will have LLC or another version of the entity type at the end of it. There are also some terms it can’t contain, such as “trustee” or “corporation,” so be sure you evaluate these.
You’ll also need to file the Articles of Organization, which includes the designation of a person who will receive the legal documents for the company. Other information might also be required, so it’s a good idea to review your document to determine if you’ve covered everything.
If you have a partner in the LLC, you need to have an operating agreement. This outlines the profit and loss division and handles other legal matters. It also includes the procedure for dissolving the LLC.
You also need to obtain the employer identification number and any business license necessary. Opening a business bank account is another necessary step for you to take. Working with someone familiar with this process in your area is often beneficial so you aren’t flying blind.