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LLC Formation Steps to Ensure a Proper Limited Liability Company

The most important step for LLC formation is to make sure you do it as soon as you know you need a limited liability company. You do not and cannot obtain the protection afforded by this legal entity until the formation process has been completed and done properly. best registered agent services

Choose State of Formation

The initial question is to decide where you are going to form an LLC for your business. For most small businesses, this is in the state where you will be operating your business. Don’t fall into the trap of forming in Delaware or Nevada and thinking you will not need to register in your state. If you are conducting any regular business activity in your state, you will end up having to register your legal entity business there in any event. Save the double filing and maintenance fees and extra registered agent fees. Now, if you are putting together a complex business structure with many investors in different states or countries, then Delaware may make sense. In such situations, you should consult with your business attorney.

Choose a Name for Your LLC

Each state has name rules. In every state, you cannot name a new LLC with a name that another limited liability company registered in that state already has. In fact, in most states the name cannot be similar to other names. Recently, most states also prevent the use of any legal entity registered so this would cover corporations, registered partnerships and sometimes trusts. Some states have extra name rules. For example, you may not use words that imply a government affiliation and some will prevent the use of certain words. A good LLC formation services provider will ensure that your name is available prior to submitting your filings.

Appoint a LLC Registered Agent

In every state, the principal business of an LLC formed in that state is not required to have a principal business address in the state. However, your legal entity must have a valid and permanent registered agent an registered office address. What is the difference? A registered agent is not an operational role but purely an administrative role for state regulation purposes. If a third party wants or needs to serve legal papers or important notices to the registered business in a state, that LLC must have an officially designated person or legal entity in that state to accept such papers.

This is needed because a limited liability company is a fictitious person. It does not have a physical being. But because it is its independent person under the law, the state needs a certain and known place for communicating with the business. Each state has its own requirements for what qualifies as a valid registered agent. Check out the specific rules or inquire with your LLC formation services provider.

Determine the Mandatory Filing Disclosure Requirements

Each state can vary greatly when it comes to what information must be disclosed and provided in an LLC formation filing. Delaware is famous because it requires so little in terms of information. This is great for privacy purposes. Other states like Texas require more information and even require that member names and address be listed. The key here is to ensure that you include all the statutorily mandated information or else your filing will be rejected or placed on hold- which creates a nightmare or long delays to get your LLC registration back on track.

Fees

Filing fees can change from year to year. Paying the wrong amount or writing the check to the wrong entity are two of the most common reasons for LLC registration rejections. Take the time to get the latest information on what is necessary.

SUMMARY

Because LLC registration and procedures are so important to getting your business up and running quickly and to ensure proper personal liability protection, you should consider retaining the services of companies who specialize in legal entity formation services. Business attorneys are certainly a possibility but often their fees for this process are quite high. Another option is your accountant but many accountants will mark up the service and outsource to a document filing formation company. With the Internet, it is now possible for new business owners to go directly to the source and purchase expert LLC formation services directly from reputable and experience companies.