What is an LLC anyway? An LLC is a legal business entity that provides you with limited liability protection. It’s a combination of the operational characteristics of a partnership and the limited liability and tax advantages of C and S Corporations. It is one of the simplest entities to set up, and can actually be done by anyone.
Setting up an LLC or what we call Limited Liability Company is actually brief and easy. It will only take about 1 to 4 hours. The duration depends on the complexity of the company.
Here are the easy steps to do it:
• Acquire a copy of the “LLC Articles of Organization form” from your state. You can get this from the Secretary of State office. Find out if the state requires that you post a notice in the newspaper. And study their rules with regards to business names.
• Choose your business name. Make sure you comply with the state’s rule regarding LLC business names.
• Fill out the form (LLC Articles of Organization). This is just as easy as pie. You don’t need to specify your management structure. Just list the names of the LLC members.
• If the state requires you to publish a post on a newspaper about you setting up an LLC, then do it. Although this is only required in certain places like New York and Arizona, ask the Secretary of State to be sure.
• Submit your form (the LLC Articles of Organization) to the Secretary of State. This includes your filing fee that ranges from $4 to $900.
• After that, legally you are done. Although, you might still need to create an LLC Operating Agreement after all the filing processes are done. If there are two or more owners, it is recommended that you create this agreement; otherwise, you can skip the process if you’re the sole owner. This isn’t required by the state anyway.
• If setting up an LLC Operating Agreement has been decided upon, it should spell out the financial and management rights and responsibilities of the LLC members.
Although not required, it is recommended that you create an LLC Operating Agreement. Why? It’s because in cases like this, it is possible to have conflicts later on (especially among friends and family members). You would never want to leave blank answers to questions that will drag the business down along with your personal relationships. So it should be written!
You can actually hire an attorney to help you in setting up an LLC. But frankly speaking, unless the organization you’re setting up is fairly complex, you won’t need the help of any lawyer.
So finally, do you think this is the right time to set up an LLC? Maybe after thorough research, day after day and night after night, or even after years of dedicated feasibility studies; you’ve already succeeded. Have you found the perfect business that you’ve been utterly waiting for? Start your small investment right now. Make your business plan and raise your capital.