Create an LLC in Los Angeles: The Top 5 Things to Consider

Creating an LLC in Los Angeles comes with a unique set of considerations. With so many legal structures available to small business owners, it's important to understand the implications of each option in order to make the best choice for your own business. Our article covers the top five things to take into account when forming an LLC in Los Angeles, as well as how to access the legal services you'll need to make the process smooth and successful.

An LLC, or Limited Liability Company, is a type of business entity that provides limited liability protection for its owners. This means that the individual investors of an LLC are not personally liable for its debts, meaning that creditors cannot come after the personal assets of an owner in order to pay the company's debts. The LLC is also known as a "flow-through entity," meaning that it provides pass-through taxation: the tax liabilities of the LLC are passed on to the LLC's individual owners, who are then responsible for filing and paying their own individual taxes.

When deciding to create an LLC in Los Angeles, there are important factors to consider. Below are five of the most important for entrepreneurs to bear in mind as they work to form a California-based LLC.

1. Name Your Company

The first step when creating an LLC is selecting a name for the company. California LLCs must include the phrase "limited liability company" or "LLC" in the name, and the name must be distinguishable from any other existing business. Additionally, certain names and phrases are restricted or not allowed, including "University," "Bank," and "Attorney." Before filing your LLC paperwork, you must conduct a name search to ensure that the name you have chosen is not yet taken and not restricted.

2. Obtain an EIN

Once you have chosen a name for your new LLC, you must obtain an Employer Identification Number (EIN). An EIN is a unique number that is assigned to businesses by the Internal Revenue Service and is used for tax-filing purposes. Obtaining an EIN is relatively simple, and may be done online or via mail.

3. Create an Operating Agreement

Once your LLC is filed your Operating Agreement should be drafted and executed. An Operating Agreement is like a constitution that governs the internal rules and operations of your business. It outlines everything from the structure of the company to managerial responsibilities and ownership shares, and is an internal document. This is particularly important if the company has multiple owners.

4. Timing

Timing is an important consideration with forming an LLC: the process is relatively straightforward but can take some time. The minimum timeline for getting an LLC filed in California is two weeks, but can take longer depending on the specifics of your case. Before embarking on the creation process, make sure you build in ample time for the requisite steps and paperwork.

5. Seek Legal Counsel

Finally, it's important to remember that forming an LLC is a legal process, and should be done with professional guidance and care. Working with an experienced business attorney with a deep familiarity with local regulations can provide an invaluable safeguard and efficiency booster—not to mention peace of mind—for entrepreneurs.

For those in Los Angeles, look no further than UpCounsel. Whether you need a one-time consult or an entire freelance legal department, UpCounsel’s network of experienced lawyers has you covered. From small businesses to the Fortune 1000, groundbreaking companies of all sizes trust UpCounsel and its attorney community to provide high quality, cost-effective legal services. Access to high quality attorneys on demand, business attorneys have an average of 14 years of experience, profiles of our online attorneys display client ratings and reviews of recent work.

Creating an LLC can be a daunting process. With the above five tips and UpCounsel's network of experienced attorneys at your side, however, the process need not be intimidating. Take advantage of the legal skillset the UpCounsel attorneys have to offer, and move forward with the utmost confidence in your LLC creation journey.


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