The first step is to come up with a name.  Legally, every state generally will not allow you to use a name that is already registered with the state.  These names include not just other LLC entities but corporations, partnerships, and sometimes even state filed DBA registrations.  Spend the right amount of time coming up with a good name for your company and then check with the state to see if it is available for use as a limited liability company name.  If you are using a reputable formation company, they will check and ensure name availability as part of the filing.

The next step is to decide whether you will serve as the registered agent of the company or whether you want to retain a lawyer or a registered agent service.  If you are really cash strapped, then you can serve in this role as long as you have a permanent physical address in the state of formation where officially delivered documents (e.g., personal couriers) can be accepted and sign for during business hours.  However, the better choice is to retain a good national registered agent services company to handle this for you and your business.  This not only takes away the stress of compliance but also keeps your name off the publicly available registered office records.  Many marketers tap this database and send a lot of junk mail.

All states require an acceptable name and a registered agent.  Each state differs in what other information, if any, it requires as part of a limited liability company formation filing.  It is important to check with the corporation agency in our state for the list of mandatory disclosures and the required formatting of the filing documents.  Some states require the disclosure of members while others want a business purpose and principal office address.  Every state allows for additional provisions to be included if desired by the company.  For example, many companies want to include an indemnity provision to confirm protection of officers and managers.

Finally, the payment of a filing fee is part of every formation process.  Fees can be confusing in certain states.  This is because there is a standard fee and then potential add on fees.  Add on fees usually are for faster processing.  Processing time is very important.  Some of the more popular states like California and Delaware have extremely long processing times if you just submit the standard filing.  However, for a minimal expedite fee, you can get your LLC formed in just one or two business days.

You do not want to conduct any business or enter into any contracts until your limited liability company has been completely formed and a certificate of existence has been issued by the state.  Why?  Because your personal liability protection is based on the existence of a fully compliant legal entity.  In addition, it is a nightmare to start conducting business in your own personal name and then trying to properly transfer such activity into an LLC that has been formed after the fact.  It is done all the time as it is always better to start one  for business than not to at all.  However, even if you do, any business related obligations, lawsuits or activity that was conducted before will not be protected by a business vehicle that is later formed.

The main reason for using one is to create an independent and separate vehicle to run and conduct activity.  This separation from the owners of the limited liability company creates a layer of personal liability protection for the owners.  For example, if you start and run a business without a legal entity such as an LLC, you are completely and fully personally liable for anything related to your business.  This is because a business run this way (known as a sole proprietorship), is a part of you as a person.

By forming an LLC, you create a separate house to be the operator of the business.  This kind of entity is similar to a corporation when it comes to personal asset protection, but it is more suitable for the smaller business enterprise because it is a much simpler entity to create, maintain and manage.  In addition, it is a much more flexible entity than the corporation precisely because it was created to offer the benefits of a corporation without the disadvantages.  The LLC laws allow the owners to structure the ownership, management, and operation of the entity in a way that meets the needs of that particular business.  There are very little required formalities and requirements in the LLC laws.

Some people mistakenly refer to this entity as a limited liability corporation but it is not an incorporated entity at all.  The label of incorporated or unincorporated does not matter practically because you get the same level of protection.

Another advantage of a limited liability company is tax related.  With a corporation, profits are subject to double taxation and often you cannot take advantage of business loses immediately.  The LLC offers automatic and unqualified pass through taxation (also known as a single layer of taxation) and this results in less taxes and the ability to pass through losses that can be leveraged by the owners of the business to offset other income in many circumstances.  Check with your accountant for specific details.

Finally, the state legislatures of almost all 50 states are committed to continually improving the limited liability company laws to address any limitations or challenges that are faced as more and more people use it.  This has resulted in creating an even more perfect entity for small business.

As a result, the limited liability company has far outpaced the corporation when it comes to small business.  This is because it is ideal for many uses when it comes to running a private business, a joint venture, estate planning, asset protection strategies, real estate and self employment/consulting.

FIND THE RIGHT LIMITED LIABILITY CORPORATION FORM

First you need to determine if you are going to create a limited liability company or a corporation for your business entity. Each state has a different form for each of those types. Second, within each type, you can form a regular legal entity or a professional entity .

Professional limited liability corporations are limited to those running a professional licensed business such as a law firm, medical practice, engineering, accountant or architect business.
In the corporation arena, there are also nonprofit corporations and each state usually has a specific form for these kind of organizations. Often, they are considered non-stock corporations.

MAKE SURE YOU GET THE LATEST FORMS

Each state reviews their business organizations laws and procedures every year and sometimes this review generated new forms for new legal entities. Be sure you are reviewing the latest and most recent documents put out by the state.

CALL THE STATE AGENCY IN ADDITION TO REVIEWING DOCUMENT INSTRUCTIONS

It is always a good idea to call the state agency that is responsible for processing new legal entity formations. This is because any states imposed more informal processes and rules and it is a good idea to know about them prior to submitting an official incorporation filing.

For example, many states have peculiar rules when it comes to determining if a name will be accepted for a new business. Limited liability corporation form instructions will not go into this much detail.
Another issue that is worth confirming over the phone is how the state accepts payment and what the options are for expedited filings. Many times a new business owners needs their company formed fast so they can start working on their business.

Some states can have regular processing times as long as two months. But those states will offer expedited filing options for additional fees. In some cases, for as little as fifty to a hundred dollars, you can get your filing completed in a few days.

WHERE TO FIND FORMS

Most states make their forms available online through the state agency that regulates business organizations. Some states require that you call in and request them and they will either email or mail them to you. It is always a good idea to peruse through the set up provisions of the official statutes in a state as well.

Privacy Is Paramount

Just as with corporations, Delaware continues to be a state that protects the most private information when it comes to a limited liability company. It requires only minimal basic information to be disclosed on the public records.

Experienced and Business Friendly State Agency

The Delaware Division of Corporations is one of the most well organized and efficient state agencies.  They have a team of trained specialists who know everything about legal entity formations and incorporations.  They pride themselves in offering the most business and consumer friendly help available and they offer many more options when it comes to filings than any other state.  Delaware is one of the few states that will accept filings via facsimile which can speed up the process of Delaware LLC formation tremendously.

Delaware Registered Agents

Just as with other states, Delaware does require that a Delaware limited liability company have an officially appointed and qualified registered agent and registered office in the state.  Because Delaware has been the number one state for incorporations and corporations have the same requirements, there is a network of qualified registered agent companies in Delaware that offer top rate service at extremely affordable rates.

Delaware Certificate of Formation

In order to form an Delaware LLC, an official document called the Certificate of Formation must be filed with the State. It must include the name of the company, the name and address of the registered agent, and can include any other matters that a company chooses to include.  Many business will include indemnification and limitation of liability provisions just to ensure that their owners and managers receive the utmost protection available.

More Elaborate Limited Liability Company Law

Because this State has so much experience in governance matters and has probably dealt with almost any legal entity issue you can imagine (through its corporations laws), Delaware passed The Delaware Limited Liability Company Act which has more in depth provisions regarding the management and ownership of an LLC. This statute includes guidance for not only the major matters (such as formation, members, managers, and dissolution) but other topics such as finance, distributions, member and manager resignation, series LLC matters, conversions and derivative actions.

Of course, Delaware honors the one of the biggest benefits of limited liability company entities generally- that of flexibility.  It allows an LLC a lot of flexibility when it comes to setting up a management, ownership and operational structure that makes the most sense for each specific business.

SUMMARY

When it comes to the limited liability company, the great majority of them are formed in the home state of where the business will be primarily conducted.  However, in some situations, it makes more sense to form the legal entity in a state which has favorable and proven LLC laws that will support the business as it grows and evolves.  The State of Delaware has proven to be the best state for such situations because of its established laws, strong and fast courts, the formidable Delaware Secretary of State, and the strong network of services that have supported Delaware legal entity matters for over a century.

While each state varies, most steps are as follows:

ONE: Give your business LLC a name.  The business name should comply with the states rules and regulations.  It as well should not be similar to another of an already existing company.  Also, most states have required designations that must be at the end of the name (e.g., LLC).

TWO: Ensure that all the paperwork is completed and prepared in accordance with all state requirements.  The filing document is typically called the Articles of Organization but some states use different terminology.  It is a good idea to check not only the instructions provided by state forms but also the latest statutory language to ensure you meet all requirements.   You will also have to pay a filing fee when submitting your article of organization.   And, every state requires a registered agent and office within the state of formation.  Check your state’s registered agent requirements.

THREE: Once formed, an LLC should adopt a written LLC operating agreement.  This document evidences ownership of the business and also puts in place a management and operational structure for how the LLC conducts business and makes decisions.

FOUR: In a few states, there is a publication or written notice requirement.  This process usually involces obtaining a and publishing in a stated newspaper the existence of your LLC.  After a set period of weeks, the LLC will need to submit an affidavit or other confirmation to the LLC filing office of having met this requirement.

FIVE:  After the state issues a certificate evidencing the formation of the LLC, the legal entity is technically formed and in existence.  However, you should research and determine what other permits and licenses (tax registration certificate) are required to operate your business.

When learning how to form an LLC, the key is in the details and processes.  If you want to be sure your LLC is formed properly, you can hire an experienced lawyer to assist you or you can retain the services of an experienced document service company- there are several reputable ones that special in LLC formation services.

The registration of an LLC is not a very tasking activity. You do need to know that  registration of LLCs are governed by the rules and regulations of each state. Every state has a specific department who handles all the fiilgns and regulations of legal entities in the state.  During registration, a document filing is required and a filing fee has to be paid which differs in amount from one state to another.  There are also state specific disclosure requirements and every limited liability company must have a registered agent appointed in the state.

You can choose to form your LLC in any state; however, you must register that LLC in every state where it is conducting regular business.  For most small businesses, it makes the most sense to choose the home state as the main formation state as it can save you time,money and reduce reporting requirements each year.

If a business is going to conduct business in other states, it must register in those additional states.  This is known as a foreign qualification registration.  The process is similar to an organization filing in that there is a document filing, a required fee, a registered agent appointment, and likely some ongoing maintenance requirements.

Due to the lawsuit and liability epidemic in this country, it is never a good idea to move forward without the personal liability protection afforded by the limited liability company.  Given the low costs to form an LLC and maintain it, the benefit of asset protection plus the other advantages of using an LLC greatly outweigh the costs.

If you are going to run a business, you will be required to interact with other people, other companies, the government, and others.  Every time your business has a transaction or even just a connection with a third party, there is a risk of a problem occurring either right then (such as when a customer falls on your property) or way into the future (such as being sued over a dispute in a long term supplier contract).

Now, when you form a business LLC, the protection is not aboslute and so other precautions such as having smart contracts and purchasing insurance is also necesary.  But it does offer a base layer of protection that is just not there if you run a business as a sole proprietorship.

Don’t think that waiting until the business takes off is the right time for a limited liability company.  This is the worse thing you could do.  You see, when a company starts to make money, it becomes a much bigger target for lawsuits.  And, a lawsuit can relate to any business activity in the past.  So, someone can sue you for something that took place when the business was just started and making no money, but yet sue and ask for lots of money at the time it has become successful.

Be smart and form a business LLC as soon as possible after you decide to start a new venture.  Make sure you meet all the LLC formation requirements of your state and you properly form and maintain your business entity at all times.

Another reason for the popularity of the Arizona LLC is management and operational flexibility.  There are two main management structures- member managed and manager managed.  In addition to the top layer of management, a limited liability company in AZ can also hire non-member employees and compensation them.

However, it is very important to assuring you obtain personal liability protection, that you form and process your LLC formation prior to engaging in any major business activity.

The time it takes to register an LLC varies with each state.  Regular filings can vary from as short as one business day to as long as four to six weeks.  Luckily, most states also offer an expedited filing option.  If you elect to expedite your LLC registration, in most cases you are looking at one business day.  In busy legal entity states such as Delaware, they even have expedited options which will cause the formation in as short as a few hours.

Of course, with any expedited option, you are going to have to pay more in filing fees.  Usually, you will pay twice as much and in some cases, the fees get extremely expensive for a same day filing.

Given that most new businesses are cash strapped, a smart entrepreneur will ensure that a new LLC is registered and all other legal requirements are obtained prior to conducting any business.

As soon as you are committed to starting a new business, make sure you get the process to register an LLC started as soon as possible.  This will not only save you time, money and stress, but it will also provide longer protection for you as a business owner.

LLC means a limited liability company. If a person is interested to start or open a limited liability company he needs to go through some basic research. A person may follow the following steps that may guide him or her to start a limited liability company.

• A good business idea: To give your business a kick start you really need to have to choose or even create a business idea that you think will be suitable. This is a very necessary step however many people who want to make their future in business do not have any clue about what business they do want to start. For any budding entrepreneur there are many open options such as to buy a franchisee or to take over in existing business. They can even get started with the new idea or look for them to start a new business and so once you have decided the business of your wish them the actual work begins.
• An elaborated Business plan: When your business idea is in your hand you can start up with it and create a business plan. Creating a good business plan is very important because this will prove to be a very important factor for the people or institutions that are financing your business. The financers can be any of the friends and family or even the investors or the banks that provide loan on new business. While seeking finance from the investors or the banks make sure that they understand your concept of the business properly.
• To generate finance: To generate finance you must contact every possible person or company or firm that may help you in generating a suitable amount of money to start an LLC business. Every small business has three finance generating options: family or friends, the individual investors or bank loans. Usually if a person approaches family or friends they demand for the ownership rights in the business. If a person approaches the bank or the investors for a loan to start his or her business they will charge interest on whatever amount they are providing. These interests on loans can act as an additional expense and can also erode your personal business profits.
• To get started: after you have acquired a suitable amount of finance you may start working on implementing the business plan. But before doing so you must consider all the legal issues that may concern your business. Once you have cleared all these issues you can get started with the actual business plan and can implement it in your own way.

The above given procedure may seem to be very complicated but if a person applies them in a proper and planned way it may prove to be very useful to help to start an LLC business

What is a limited liability company? It is the ideal legal entity and planning vehicle which also offers personal liability protection. Here are some specific features:

Limited Liability Protection

First and foremost, you get personal liability protection. This is the same feature of incorporation and every court has recognized that owners of an LLC are not personally liable for the debts and obligations of the business merely because they are owners.

Before, the only way to get this was to incorporate. The most common business structure used to be the sole proprietorship where there was no liability protection at all. Now you can get this without having to meet the more onerous incorporation requirements.

Simple Operations Allowed

The LLC has none of the more complex governance, reporting and meeting requirements of corporations. Because of this, a sole proprietor business or a partnership business can continue to run its operations and management as it sees fit without having to fit into a legally mandated structure.

You can have an extremely simple set of rules similar to running a business without a legal entity or you can have as complex a business and ownership structure as you need to accommodate your specific business situation. The LLC allows the most flexibility so businesses can create what they need and not anything more.

Easy to Understand Maintenance Requirements

With the limited liability company, the formation process is relatively straightforward. And, the annual maintenance requirements are easy to follow. While each state varies in its rules, most states (but not all) require the payment of an annual fee and some states require the filing of a simple informational statement each year.

The IRS loves the LLC

In addition, the IRS favors this entity when it comes to taxation. While it was not always the case, the Internal Revenue Service passed regulations back in the late 1990s which now allows for each limited liability company to choose its taxation structure. While there is some technicality and notice deadlines, an LLC can basically choose between a single layer of taxation (also known as pass through taxation), S corporation taxation and C corporation taxation.

The Most Common Choice of Legal Entity

The LLC has only been around for several decades but it has surpassed the corporation as the number one choice for operating a small business. Entrepreneurs choose it almost ten times as often because of the simplicity, flexibility and other advantages of this entity.
A limited liability company is one of the most effective creations of government since the corporation was invented way back a century ago. Only, the LLC is even better because it incorporates all the benefits of a corporation but improves upon the disadvantages of the earlier legal entity.

The major use of one of these is to run a business that has between one and as many owners as your business needs. But other uses of the LLC include holding real estate, managing jointly owned property, trusts, and estate planning.

What is a limited liability company? It is the ideal legal entity and planning vehicle which also offers personal liability protection. Here are some specific features:

Limited Liability Protection

First and foremost, you get personal liability protection. This is the same feature of incorporation and every court has recognized that owners of an LLC are not personally liable for the debts and obligations of the business merely because they are owners.

Before, the only way to get this was to incorporate. The most common business structure used to be the sole proprietorship where there was no liability protection at all. Now you can get this without having to meet the more onerous incorporation requirements.

Simple Operations Allowed

The LLC has none of the more complex governance, reporting and meeting requirements of corporations. Because of this, a sole proprietor business or a partnership business can continue to run its operations and management as it sees fit without having to fit into a legally mandated structure.

You can have an extremely simple set of rules similar to running a business without a legal entity or you can have as complex a business and ownership structure as you need to accommodate your specific business situation. The LLC allows the most flexibility so businesses can create what they need and not anything more.

Easy to Understand Maintenance Requirements

With the limited liability company, the formation process is relatively straightforward. And, the annual maintenance requirements are easy to follow. While each state varies in its rules, most states (but not all) require the payment of an annual fee and some states require the filing of a simple informational statement each year.

The IRS loves the LLC

In addition, the IRS favors this entity when it comes to taxation. While it was not always the case, the Internal Revenue Service passed regulations back in the late 1990s which now allows for each limited liability company to choose its taxation structure. While there is some technicality and notice deadlines, an LLC can basically choose between a single layer of taxation (also known as pass through taxation), S corporation taxation and C corporation taxation.

The Most Common Choice of Legal Entity

The LLC has only been around for several decades but it has surpassed the corporation as the number one choice for operating a small business. Entrepreneurs choose it almost ten times as often because of the simplicity, flexibility and other advantages of this entity.

New business owners overwhelmingly chose limited liability company as their entity of choice when starting a new business. There are three main reasons why this is so.

REASON #1: Personal Liability Protection

Running a business is risky undertaking. This is not only because an entrepreneur is putting lot of time and money into the business but also because a business is inherently a target for lawsuits. Businesses must interact with other parties such as customers, vendors, suppliers, contractors, employees and partners.

With every interaction, there arises a chance that an accident or a dispute may arise either now or in the future. In addition, when a business starts to make money, these other parties and their lawyers may focus even more on potential lawsuit claims and other ways to extract money from a profitable business.

Without the use of an asset protection vehicle like an LLC, you as a business owner will always be at risk for these lawsuits and the liability that can arise from them. You can lose your house and all your personal savings from just one business lawsuit. A limited liability company provides a layer of protection between your business and your personal assets.

REASON #2: Business Credibility

By operating through a limited liability company, your company name will be entitled and required to end with an LLC designation. The public will automatically know that your business has engaged in smart business planning and made an investment to organize itself properly by filing and creating a legal entity for your business.

This will distinguish your business from the thousands of others out there that are operating as sole proprietors. This is because anyone can come up with a business name and claim themselves as a business. While those may be legitimate businesses, it is difficult to separate the good from the bad fraudulent ones.

Having a limited company is a lot like having a BBB seal. The public knows that businesses with such designations are backed by someone serious about business and the planning and undertakings required to launch a business properly.

REASON #3: Business Continuity and Growth

When you start a business without a legal entity, your business is inextricably a part of you. This mean that when you die or become disabled, your business ceases as well. By that time, your business may be very valuable but in order to preserve it and continue it, your heirs and estate administrators will have to spend a lot of money and time restructuring all the contracts, relationships and details.

Many businesses will end up closing if this happens because it is too complex and expensive to restructure.

When you establish an LLC to run your business, you are creating a business which is separate and apart from yourself as the owner. The business continues despite what happens to the owner or owners. If the owners were active managers, of course there will be some interruption but the legal entity continues to operate because all the operational contracts, details, and other components required to run the business are with the limited liability company.

Also, if you ever need to bring in investors, a legal entity is almost always required because a sole proprietor business is not set up to bring in investments. Unfortunately many people start businesses thinking they will not need investment but later when they get to expansion stage, they face this big limitation and it becomes much more expensive to transfer a business into an LLC then it is to start one under a limited liability company to begin with.

LLC formation and its benefits are well worth the cost and effort for any small business. ]]> http://thellcexpert.com/llcanswers/llc-formation-alert-3-reasons-why-you-should-have-a-limited-liability-company/feed/ 0 http://thellcexpert.com/llcanswers/business-llc-can-ownership-be-kept-private/ http://thellcexpert.com/llcanswers/business-llc-can-ownership-be-kept-private/#comments Tue, 12 Jan 2010 19:11:28 +0000 admin http://thellcexpert.com/llcanswers/?p=474

One of the benefits of forming a business LLC is that in most states, the owners of the business are not a matter of public record.

This is not the case in all states. Some state do require that members of an LLC be disclosed and in some cases their addresses must also be listed. You need to check with your state formation requirements to be sure.

For those states that do offer privacy, there are still some pitfalls to losing privacy. For one, every state requires that an LLC have a registered agent who is listed and shows name and address is available as a matter of public record.

Some owners choose to serve as the registered agent and this results in their name and address being associated with the business LLC. If you want to be kept private, you can purchase registered agent services and have a company and its office address serve this role.

Using a registered agent service will keep your name from being publicly associated with your LLC. Just be sure you choose a reputable registered agent as this role is vital to your LLC and your legal protection. CLICK HERE FOR A TOP REGISTERED AGENT SERVICE PROVIDER

Some business owners mistakenly think that if their home state requires owner disclosure, they can avoid this disclosure by forming their limited liability company in another state.  This may be the case initially with the formation filing.

However, if your business is going to be operated in your home state or will have any business activity in that state, the LLC will need to registered in your home state and foreign LLC registration usually has the same disclosure requirements as domiciled LLC.  You may find yourself paying for two registrations and annual maintenance fees without any privacy in the end.

Click Here and Visit The LLC Learning Center for more LLC information

Here is a short list of must haves in order to avoid making the wrong choice. Choosing an incompetent or unscrupulous provider can result not only in long delays and extra cost but potentially an improper legal entity which places your liability at risk.

1. Filing Experience. While forming an LLC is an administrative process, it does require knowledge of the latest formation laws in each state and the intricacies of working with the state agency.  These things can change every year as LLC statute amends are passed and as regulatory agencies change their own rules and processes.

Unfortunately, there are too many purported incorporation services out there that put up a fancy website but have no experience in this area.  The best way to confirm experience is to look up the company with BBB (Better Business Bureau) and review any customer commentary.

2. Guarantee. One of the best indicators of a professional LLC incorporation company is one who backs its services with a real guarantee.  The most effective guarantee is one that certifies that the formation of your LLC will be in compliance with state requirements.  Also, having a satisfaction guarantee is a plus.

3. LLC Knowledge. Forming LLCs involves an ever changing process which can vary based on state.  Look for indications that your chosen incorporate LLC provider has the resources and the commitment to be able to keep up with the knowledge required to provide this service effectively.

4. Customer Support. While incorporation companies are not allowed to offer legal advice, they should have knowledgeable staff available to their customers to help with your general questions and concerns. Always look for a customer support phone number and online answers and articles as evidence.

5. Insist on a US Based Company and Avoid Resellers. Believe it or not, there are some companies selling US LLC formation services that have their fulfillment staff in other countries such as India.  And, many online formation companies merely resell the service and outsource the actual work to another company.  While this is difficult to ascertain from a website, these structures are signs to stay away.

In these cases, there is no real accountability and you want to be dealing with the people who are actually forming your LLC.

In summary, insist on using the most reputable LLC formation companies.  Having a properly formed LLC is so important to starting your business the right way and preserving liability.

RECOMMENDATIONS:

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Yes, the author of this post is biased as this database in sponsored by The LLC Expert.  So, here is another top rate LLC formation company to consider.

One of the preeminent online LLC formation providers is a company called Business Filings.  In terms of experience and longevity Business Filings has been providing LLC and incorporation services longer than most any provider.

In fact, its sister company is the #1 provider of incorporation and governance services to the largest law firms and corporate legal departments in the country.  As a result, by going with this company, you are choosing the best in the business- backed by customer support and a compliance guarantee.  Click Here to get $15 Off BizFilings most LLC Formation Packages

This is the best thing you can do for yourself and your business because as a sole proprietor, you are totally and completely at risk personally for any business obligation, business problem or lawsuit.

Starting a LLC for an existing business is not always an easy process and the longer you have in business and the more assets, contracts and operations you have the more onerous it is.

Having said that, the longer you wait, the more complex it will be so the earlier you can get the process started the better.

FORM AN LLC IN YOUR STATE

First you need to form an LLC in your state of primary operations.  This consists of preparing a legal filing with your state agency that complies with the LLC formation requirements in your state.

After your LLC is formed, it is a new entity that only exists from the formation date given to it by the state agency.

OBTAIN ALL REGISTRATIONS AND PERMITS FOR YOUR NEW LLC

After formation, you will need to get an EIN# for your new LLC and register it with the state tax department and obtain any other licenses you need to operate your business. These would be the same ones you have under your current business only now you need to obtain them in the name of your new LLC.

In some instances, you may be able to transfer your existing licenses to the LLC.  Check with each agency responsible for issuing the license/permit to see if this is possible.

OPEN A NEW BANK ACCOUNT IN THE NAME OF YOUR NEW LLC

Once you obtain an EIN# for your new LLC, you will want to open a bank account for your new LLC.  You should consider using the same bank where you have your existing sole proprietor accounts but do not close those accounts just yet.

There will be a transition period where you will need to conduct banking transactions still with your old business while things are moving into the new LLC business.

TRANSFER ASSETS FROM OLD BUSINESS TO NEW LLC BUSINESS

At this point of starting a LLC, you have a new legal entity and all the requirements to operate.  Now, you will need to transfer the existing business assets to the new LLC.  You may still want to keep some money in the old bank account to cover transitionary issues.

If your business has a lot of assets, you may want to consult an attorney to help you with this.  Generally, all personal property (including money) is transferred using a document called a Bill of Sale.  Real Estate requires a deed recorded in the county where the real estate is located.  Intellectual property (like domain names, trademarks, etc.) is transferred using an Assignment document.

TRANSFER CONTRACTS AND TRANSITION BUSINESS RELATIONSHIPS

This step is where it can be a hassle but not always.  If your old business is a party to contracts that are still active and required for business, you will want to assign those contracts from you(your old business) to your new LLC.

You will need to see if that can be done without the approval of the other party.  If not, you will need to call and get written approval before assigning the contracts.

Also, you may have established business relatioships and accounts with other parties such as vendors, suppliers, partners, etc.  The best thing you can do here is to call them up, tell them you are transitioning your business to an LLC and discuss with them how to properly have the LLC take the place of your existing business and relationships.

Document everything that was agreed upon.

KEEP EXISTING BUSINESS STRUCTURE IN PLACE FOR AWHILE UNTIL BUSINESS IS RUNNING 100% THROUGH NEW LLC

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It is not easy to do the transition, but the sooner you do it, the faster you will get the protection and other benefits of operating a business through a limited liability company.

It is important to know that you do not get this protection for existing business liability and for anything that may come up later related to the business activity conducted prior to the LLC being formed.

IS STARTS WITH LLC FORMATION –

The best and fastest method to get a proper LLC in place is to retain the services of a reputable LLC formation services provider. You can click here for more information about  The LLC Expert’s LLC formation services or click on this button for a $15 discount from one of the top providers of LLC formation services.

Small business lawsuits are on the rise and business owners need the liability protection afforded by LLC incorporations more than ever. It is risky to start a business. You now only will be investing your time and your money into a new endeavor but you are also going to be making decisions, entering into contracts and transacting and interacting with a myriad of other people and business entities.

The last thing you want to do is subject yourself to incredible personal liability by operating the business directly. This direct structure is known as a sole proprietorship and it leaves its owners 100% at risk for potentially large liabilities.

The LLC was created specifically to cater to small businesses. State legislatures made them relatively straightforward to form and easier to maintain and operate.

Do not risk your own liability and loss of your personal assets. Complete the LLC incorporation process prior to conducting in any business activity.

LLC registration involves preparing and submitting a legally compliant filing with the state agency in the state where you want your LLC to be formed. Once the state processes the LLC, your LLC legal entity is in existence.

However, at that point, it is merely a shell entity. It is up to you to give the LLC owners and provide it with its own set of rules and governance procedures. This is typically done by executing and adopting an LLC operating agreement which acts as an owner and user manual for the LLC business.

After taking care of the LLC structure, a new business also should complete other required registrations such as obtaining federal and state tax identification numbers and obtaining a business license at the local level.

Depending on your business, there may be other licenses and permits required (for example a sales tax license if you are selling goods or a professional license if your business activity is regulated by another agency.

The LLC registration is important because it creates the vehicle for your business and so you need to be sure it is done properly.  Visit The LLC Expert for more information about LLC Formation. , After formation, remember that running a business involves a myriad of other ongoing requirements, processes and activity.

In order to form an LLC, an LLC registration filing needs to be made with the state agency that handles legal entities.  This is usually the Secretary of State for most states but a few states use a different agency name.

An LLC Registration usually consists of  a set of documents which contain the required disclosures by the state.  In addition, an appropriate fee must be made.

Once an LLC has been formed, it is authorized to conduct business in its state of formation.  But, in order to conduct business in other states, that LLC must also complete an LLC registration in such other states.

Each state imposes it own set of rules and requirements for what must be done in order for an LLC to register and do business in the state.  Once registered, it can conduct business in other states but the LLC retains the citizenship of its original state of formation.

But in every case, you must know that a limited liability company does not exist until the processing for its formation has been fully completed and processed by the state agency responsible for forming LLCs.

The only way to know if one has been completed is when the state shows the existence of your LLC in its records. It is important that you not engage in any business until the LLC is formed as formation is a prerequisite to gaining the benefit of limited liability protection provided by the legal entity.

Now, how to start an LLC. Each state has its own set of rules and requirements which must go into a filing made to the state. First, there are name rules which govern what kind of name you can give your LLC. You can look these up in the laws or just call your state agency and have them check whether your desired name is acceptable.

Second, there is a registered agent requirement. Every LLC is required to have a registered agent appointed. Each state has its own set of registered agent rules. These can be found in the state’s LLC laws.

Third, there will be a set of disclosure requirements which vary from state to state. Some states require very little information while others have some onerous disclosures. For example, Texas requires that all members and their addresses be listed for member managed Texas LLC entities. These requirements are found in the organization provisions of the LLC laws.

Fourth, you need to determine processing times and the proper filing fee. Always, always, always understand the processing times for your filing. In states like California and Delaware, a normal filing will take more than 6 weeks! This is not acceptable for most people who want to start an LLC for a business.

The good news is that those states as well as most other states offer an expedited process for additional fees in which your LLC can be formed in a week or even a day if the proper fee is paid.

As step 4, determine what processing time you need and the fees to be paid. Also, make sure you find out exactly who you need to write the check out to. This can prevent your filing from being rejected and delayed.

Fifth, prepare and submit your filing. Once processed, your LLC has been formed and started.

At this point you have a shell LLC. So, you need to provide it with its own rules and create members and a management structure. This is typically done with a written LLC Operating Agreement.

Finally, you will want to obtain federal and state tax ID numbers for your new LLC.

Because there are so many variations and intricacies imposed by each state, the best approach is to hire a reputable LLC filing service to handle it for you.

The LLC Expert offers LLC formation services in some states (go to our Form an LLC page.

The LLC Expert also recommends one of the largest LLC formation providers- a company that handles this for many of the large corporate law firms and corporate legal departments in the country. CLICK HERE TO GET $15 OFF.

The Florida Limited Liability Company Act is also one of the first to be adopted in the US.  It has been constantly improved throughout the years.

Florida LLC Formation requires that a filing be prepared and submitted with the Department of State.  The filing must contain certain statutorily required information.  A Florida resident registered agent is also required to be appoint and continuously maintained.

The LLC Expert has a special Florida division dedicated to providing services for forming an  LLC in Florida.  Visit us where you can get Florida specific LLC information: http://www.FloridaLLCFormation.com