How Long Does an LLC Last: Everything You Need to Know
How long does an LLC last? This is a question with more than one possible answer because it's determined by the LLC's articles of organization.3 min read
2. Naming an LLC
3. Registered Names and Trademarks
4. Preparing the Articles of Organization
5. The Operating Agreement Role in How Long an LLC Lasts
How long does an LLC last? This is a question with more than one possible answer because it's determined by the LLC's articles of organization. An LLC can be basically unending or perpetual with no ending or expiration. Or, it can be created for a specific purpose with a defined end date that's stated in the articles of organization.
Starting a Limited Liability Company
It's fairly easy to form an LLC. To create an LLC as a legal entity:
- Check your state's LLC regulations on business names, and choose an available name for your business.
- Prepare and file the paperwork required by your state. The paperwork is typically called the articles of organization.
- Pay the state's filing fee when submitting your articles of organization paperwork. Filing fees for forming an LLC can be anywhere from $100 to $800, depending on which state you're filing in.
- Prepare the operating agreement for the LLC. The operating agreement is a document that describes both the rights and the responsibilities assigned to each member of the LLC.
- If required by your state, release a published notice of intent to form an LLC.
- Get all the business licenses and operating permits the LLC will need to operate.
Naming an LLC
Each state's LLC division has rules for naming businesses, and chosen names have to follow those rules to get approved. The LLC division is usually under the umbrella of the Secretary of State's office. LLC naming requirements vary from state to state, but usually:
- You can't choose the same name another LLC in the state is using.
- An LLC designator must be on the end of the name. These include LLC, L.L.C., Ltd., and Limited Liability Company.
- Prohibited words, like bank, insurance, city, and corporation can't be included in an LLC's name.
Some states also allow businesses to pay a fee to reserve desired LLC names for a short time while preparing the articles of organization.
Registered Names and Trademarks
To find out if the name you want is already registered to another business, check with the office that handles LLCs for your state. In addition to not using another company's name, you can't use another company's trademark. With these details settled, it's time to file the articles of organization with the state. Certificate of formation and certificate of organization are two other names for the articles of organization. The name of your business is registered automatically when you file the articles of organization with the state.
Preparing the Articles of Organization
While the term articles of organization may sound like a complex thing, the documents are actually short and simple. Some entrepreneurs prepare their own in a matter of minutes by filling in blanks and ticking off checkboxes an LLC formation package or a form from the state's LLC filing office. The paperwork can be prepared by one person who has been assigned the task or by all members of the LLC. The common information to add to the form includes:
- The LLC's chosen name
- The address of the LLC
- Names of the LLC's members
- The name and address of the LLC's registered agent, who may also be called the agent for service of process
The LLC's agent is the designated person who receives legal paperwork in the event of a lawsuit against the business.
The Operating Agreement Role in How Long an LLC Lasts
Provisions known as buy-sell provisions are included in the operating agreement to explain what will happen if one of the LLC's members decides to sell their interest, if a member passes away, and if a member becomes disabled. Some other details that belong in an operating agreement include:
- The percentage of interest each member has in the business
- Each member's rights and responsibilities in relation to the LLC
- The amount of leverage assigned to each member's vote
- Details about the manner in which profits and losses are going to be allocated to members
- The LLC's rules about how meetings will be held and how votes will be taken
- How the LLC will operate and be managed
While an operating agreement isn't required by law and is not filed with the LLC filing office, it's important to prepare this document.
If you need help with how long an LLC lasts, you can post your legal need on UpCounsel's marketplace. UpCounsel accepts only the top 5 percent of lawyers to its site. Lawyers on UpCounsel come from law schools such as Harvard Law and Yale Law and average 14 years of legal experience, including work with or on behalf of companies like Google, Menlo Ventures, and Airbnb.