When you have decided to form a limited liability company, you should first gather some key information. Information falls into two categories: (1) Information needed to form a limited liability company (LLC) in your state of formation; and (2) information needed regarding the Members (owners) of the limited liability company and the governance of the limited liability company.
1. STATE LLC FORMATION REQUIREMENTS. Each state varies in its requirements ands some states only require minimal information, but most states will require some or all of the following:
- Name of the limited liability company
- Duration of the limited liability company, if less than perpetual
- Purpose of the limited liability company
- Registered agent’s name and address
- Principal Office address
- Initial members/managers name and addresses
- Whether the limited liability company is member or manager managed
- Organizer of the limited liability company
Please note that because the filing document to form a limited liability company is a matter of public record, in most cases, you only want to include what is absolutely required in the formation documents. There are exceptions to this when the business or the ownership of the limited liability company necessitates the inclusion of additional provisions.
2.STRUCTURING A LIMITED LIABILITY COMPANY. Once you form a limited liability company, you will need to admit members to the limited liability company and impose a governance structure or set of rules for which the LLC will operate under.
- Any reservation or limitations of the right to admit new members
- Dissolution events and the right to continue business following an act of dissolution
- Management Structure Details
- Manager’s names and addresses, if managed by managers
- Contributions of members to the limited liability company
- Future contributions required of members to the limited liability company
- Voting procedures for approving limited liability company decisions
- Limitations on the ability for a member to sell or transfer ownership interests
- Possible buy-sell provisions (allowing for the limited liability company or certain members to buy back the ownership interests of other members)
- Obligations of any Member to the limited liability company
- Taxation structure for the limited liability company
The actual formation of a limited liability company with the state is a relatively straightforward process and can be done for you efficiently using The LLC Expert’s Services for Forming an LLC.
However, the area of limited liability planning regarding structuring can be quite complex and so it is always recommended that you seek the advice of an LLC lawyer to advise and help with this structuring. Generally, most of the items are set forth in the LLC Operating Agreement but some matters can also be addressed in other written agreements such as loan agreements, services agreements, employment agreements or separate member agreements with the members.
