May 19, 2007
Before and After LLC Formation: Your Do-It-Yourself Guide
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Given the advantages and flexibility of an LLC, you consider adopting it as the framework of your business. But considering that you are a neophyte in LLC, the first thing you will do is to... |
Given the advantages and flexibility of an LLC, you consider adopting it as the framework of your business. But considering that you are a neophyte in LLC, the first thing you will do is to get an LLC start-up attorney to take care of the paper works and other legal matters.
That is, if you can afford to pay them several hundred dollars or more in accomplishing different paper works in forming your LLC. But what if your budget is just too meager that you can only afford to pay the licensing fees and other charges? Is there any other way of setting up an LLC without a lawyer?
At this point, you can stop worrying about hiring an LLC lawyer. Most states encourage the entrepreneurs to form an LLC all by themselves. LLC formation is considered to be a non-technical process. It is just simple: file an article of LLC formation or commonly known as articles of organization with the state government agency that is assigned to deal with corporation and LLC matters. This organizational document is simple; it bears the description of your new LLC which includes its name, the individuals behind it, and others.
The articles of organization, as mentioned earlier, are filed with the state government agency in charge of corporate and LLC formation. Different states have different names for the offices or agencies tasked to process LLC articles of formation. To save time, you can search for it through the Internet. These agencies are attached to the state’s secretary under “corporation division”.
Take note that in some states, they are allowing you to file your articles of organization online. You just have to visit the state’s website to download their blank articles of organization. Accomplish it and you can submit it to the state’s corporation division online.
However, not all states are following the above-mentioned set-up. For instance, in the state of Arizona, they require you to publish your intention of setting up an LLC inside their territory prior on filing the articles of organization. Other states such as New York will require you to have your LLC operating agreement, while some others not.
An LLC operating agreement is the summary of the rights, privileges, and obligations of LLC owners with respect to each other and to the LLC itself. In other words, it will determine the distribution of shares and profits of each owner, and their responsibilities in all circumstances of its operation. Even not required by other states, it is recommended that you furnish a written operating agreement.
After you are done with the previous steps, you will just wait for the confirmation of your LLC formation. When you’re the formation is approved and you have complied with other state requirements, you will be given the Certificate of Existence as a proof that your LLC is already formed.
Now you have a duly-formed LLC. So what goes after its formation? If your LLC entity has already its employees, you will need an Employer Identification Number (EIN). However, in case you have formed a single-member LLC with no employees, you do not need to get an EIN: you can use your social security number as your EIN.
These are the basic steps in forming an LLC all by yourself. The process is simple; you do not need to have a lawyer by your side to look up on the formation process. Simple and no hasslethat is what LLC formation is all about.
Recommended Reading
- How to Form an LLC: 3 Basic Steps
- An Attorney’s Role in an LLC Start-up Story
- What you Should Know in Forming a Nevada LLC
- Where is the Capital? Why don’t you Go on Initial Public Offering?
