Because a limited liability company is so inexpensive and relatively straightforward to form and maintain, the costs to start a business can be very low.  And the rewards can be significant. While these people start to think about this by necessity, many are finding a true blessing in this activity.

We have customers who are already replacing their old income with consulting and services based businesses. Others are writing in raving about their increased fulfillment in doing something they really have passion for.

Many are still employed but well aware of the insecurity of the market.  They are creating LLC businesses as a part time endeavor to add another income stream and a financial cushion in the even they later lose their jobs.

For more information on LLC formation, which is the first step to starting a business, visit our LLC Learning Center.

While I do not generally provide reviews in this LLC Answers blog, BizFilings is one company that I can endorse based on my actual knowledge and relationships with the company.

First, it has been around much longer than most online businesses.  It was started in 1996 and was purchased by Wolter Kluwer, a billion dollar legal services and publications company serving the law firm and attorney market.

BizFilings has remained a separately run company focused on providing incorporation services and other related products to small business owners.  They have their owner management team and a staff of extremely well trained customer service representatives to help any new business owner through this process.

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When it comes to competency and legal compliance, BizFilings offers a compliance guarantee.  However, you can gain even more confidence in their service because its sister company, CT Corporation, also owned by Wolter, is the primary service provider of incorporation services, registered agent and other governance services to the nations largest law firms and in-house corporate legal department.

BizFilings has really become the business of choice for legal entity formations because they have combined the entrepreneurial spirit and customer focused obsession of the original BizFilings with the unparalleled corporate legal expertise and experience of Wolter Kluwer and CT Corporation.

If there is anything you should insist upon when starting a new business, it is ensuring that you have a proper and compliant incorporation or LLC formation.  It is the legal entity that provides you with liability protection and in order for a corporation or LLC to exist, it must be completely and properly organized. So, make sure you entrust this requirement to a competent lawyer or incorporation service.

While I had a lot of interaction with CT Corporation when I worked at large law firms and served as General Counsel for two companies, I also have worked with BizFilings management and have been extremely impressed with their pulse on small business and the quality of their small business services.

BizFilings offers several package levels so check the details and inquire about turnaround times to make sure you get the right one for your needs.

The rights and powers of each member to an LLC is defined by the provisions in the LLC Operating Agreement of the particular limited liability company business.  So, the answer to this question will vary widely based on what rules, powers and obligations the members have agreed upon to apply.

Having said that, the most common structure when it comes to LLC decisions is that each member’s voting power is based on his or her relative ownership in the business.  Accordingly, if a member owns more than 50% of the business, this majority member will control the ultimate decision.

Given this, if there are other members who own a significant interest (albeit not a majority), such members can negotiate to require that their vote is required for all major actions or certain, identified business decisions.  This becomes a negotiation between members when they are putting their business together or before a new member is admitted.

One option used is to make the limited liability company a manager managed LLC and to give all significant LLC members a manager position which cannot be taken away as long as that person is a member.  In this structure, a non-majority LLC member gets more power for every day business decisions.  Now, the majority member can reserve significant and strategic decisions for himself by requiring a member vote for these.

Despite the opportunity for negotiation and planning upfront, in most first time business scenarios, members are not aware enough to think through and plan for this and they do not get legal representation to handle this after LLC formation.  As a result, in most cases, default provisions of the LLC laws and in most standard LLC Operating Agreements grant the majority owner final say in the event of a disagreement.

Now, when a member makes a decision on behalf of the LLC, he/she does have certain fiduciary duties to hear out the other members and to make decisions that are reasonably in the best interest of the LLC business.  So, there are some laws that prevent abuse by a majority member.

The beginning of a new year is the most popular time to start a business.  As a result, the state agencies that handle LLC formation processing are very busy and in many states, the processing times increase greatly.

So, if you are going to start a new business, get your LLC filing completed and filed with your state.  It is really important that your limited liability company be formed prior to conducting business.  This is necessary to ensuring you have complete LLC protection offered by this legal entity.

Many motivated business owners get frustrated this time of year when they find out they need to wait 4-6 weeks for their legal entity to be organized.  Make sure that prior to purchasing an LLC formation service, ask the company about the turnaround times for the package you are buying.  Second, may sure you choose a reputable company that will form your LLC in compliance with state requirements.

New business is a great way to start a new year and to begin a journey to financial freedom but it is important you build a proper asset protection foundation with an LLC before starting your business activity.

VIDEO LIBRARY

Yes, there is nothing in the law that requires that an LLC be formed by a lawyer or other service.  A business owner can form an LLC on their own by learning about and following the legal requirements and processes required to process an LLC registration.

View the video below for steps and guidelines on how to go about doing this.  Plan on spending about 3 to 5 hours to handle this properly.  If you want to save time, The LLC Expert’s formation service only requires about 5 minutes of your time and is backed by a guarantee of compliance with your state’s LLC requirements.  Information on LLC Formation Services.

VIDEO LIBRARY

It is that time of year when many aspiring business owners find the energy and courage to take the official step of new business ownership. This is a great time to start a business not only because of strong motivation but because it is an ideal setting to start the new year by going down the path to financial freedom.

One of the first steps is to form an LLC and so if you are looking and shopping around for the right online llc formation services company, please watch this video as it will eliminate 90% of problems and issues faced by first time business owners when choosing the right company to form their limited liability companies.

When it comes to actually “signing” llc formation documents required to form a limited liability company in a state, the laws generally do not require that a member (owner) sign the filing documents.  The laws do require that an ORGANIZER sign it.  So a person must sign it but that person can be an owner, a lawyer, a document filing services company agent or anyone you desire to sign them as long as it is an actual person.

Now, this question also raises another issue because I assume it is being driven by the desire for the owner of a business to keep his or her ownership private. One of the benefits of having a limited liability company in MOST states is that owners of the LLC business are not a matter of public record.

This is important to some owners.  First, there may be private investors and these investors do not want to be disclosed as related to a business.  Second, there are just silent partners of a business.  Third there are active member managers who just do not want their ownership to be disclosed as a matter of public record.

In many states, members are not required to be disclosed in the public filing documents.  But there are a handful of states that require the disclosure of names and addresses of members and managers. When this disclosure is required to be on the official formation documents, it becomes a matter of public record.  In some states, there is a separate llc filing requirement to list members and managers and states vary whether they make these filings available to the public.

You will need to check with your particular state to determine its rules.

The process of LLC formation generally covers the LLC filing and processing of such filing by a state agency to officially create an LLC (which is a legal entity known as a limited liability company) in that particular state.

In most states, the owners (also known as the members) are not required to be identified or appointed in the formation documents. And, if this is not a requirement, you should not list your members on these documents for privacy purposes.  LLC filing documents become a matter of public record.

All the state has is the LLC name, a registered agent and the name of a person who is the organizer. The registered agent can be an owner but is not required to be.  Many business owners choose to use a registered agent service.  An organizer is the person who submits the filing documents but this person is not required to be an owner.  It can be a lawyer or a person at a document filing service who is preparing your LLC formation documents.

This means that it is up to you, after your limited liability company has been created, to officially admit yourself and any other owners as members of the legal entity.  This can be done in several ways but the most common way is through the company’s initial LLC Operating Agreement. In this document, you will establish how ownership of your LLC is structured (usually with membership units) and then set forth who owns how many membership units in the company.  Other details include the required capital contributions, member names and addresses, and parameters for what ownership gives a member in terms of financial rights and voting rights.

LLC formation is just the first step to creating a legal entity business.  The formation process itself involves doing what is necessary to create a limited liability company at the state level.  Once it is created, in order to conduct a business, you will likely need a business license.

The rules and requirements for business licenses are governed at your locality level which is the county or city where you will be conducting business.  Most localities require that a business license be obtained before any for profit business activity is conducted so check with your area as soon as your LLC formation has been completed.

A business license is typically obtained by completing and filing an application containing the necessary information about you, your limited liability company and your business activity.  There is usually a minimal fee and in some counties, you may be assessed a tax on the value of your business property each year.  This ta is usually minimal and in some cases there are certain value thresholds that must be met.  Your locality should have a detailed web page on their website about business licenses as it is a very popular topic.  If you are going to operate using a name other than your LLC name, your locality may require additional name use filings.

For more information on forming an LLC, check out other posts under this category.