LLC-1: Everything You Need to Know
An LLC-1 form is filed when an LLC establishes Articles of Organization. 3 min read
2. What is a California Single Member Limited Liability Company?
3. Choosing a Name for Your Limited Liability Company
4. How to File Articles of Organization
5. Registering an Agent on Behalf of the LLC
6. How to Prepare an Operating Agreement
An LLC-1 form is filed when an LLC establishes Articles of Organization. For example, a California LLC would need to file an LLC-1 form and submit it to the California Secretary of State when it establishes an LLC to do business in the state. However, because of California’s awful corporate tax rates, this form is actually not very common. A limited liability company, or “LLC,” is a type of business structure recognized by the Internal Revenue Service. LLCs are regulated and registered under state law, as opposed to federal law.
One of the benefits of forming a limited liability company is that it provides limited protections for the owner against any personal liability that might arise from any of the LLC’s misconduct. Legally, the LLC and the owner are considered two separate entities. As such, the owner of the LLC is shielded from any of the company’s liabilities, including any legal actions or debts.
What is a California Single Member Limited Liability Company?
If there is only one owner of a business, he or she can form a single member LLC in California. In addition to a sole owner, “one owner” in California can also mean a domestic partnership, like a husband and wife. If you are interested in forming a single member LLC, there are a few initial steps you must take, including:
- Choosing a business name
- Finalizing Articles of Organization
- Registering an agent to act on behalf of the LLC
- Preparing an Operating Agreement
Choosing a Name for Your Limited Liability Company
If you are registering as a limited liability company in California, under state law, the business name must include either “limited liability company,” “LLC,” “L.L.C,” or “Ltd. Co.” It may not include any term that suggests it is something other than an LLC, such as an insurance company, or be misleading.
The name of your limited liability company may also not be something similar to a company that already exists. To ensure this does not happen, you should first check with the California Secretary of State. The agency has a database where you can search for all of the business names registered in California. If you would like to reserve a business name, you are able to do so for sixty days by filling out a “Name Reservation Request” form with California. You can choose up to three names on each reservation form, listed in order of preference.
How to File Articles of Organization
One of the prerequisites of creating an LLC is to file Articles of Incorporation with the state’s Secretary of State. This is the LLC-1 form. There are a number of different things that must be included in the form, such as:
- The name of the LLC
- The LLC’s purpose and mission
- How the LLC will be managed
- The registered agent’s name and address
- How the LLC will accept new members
- Information about what type of events will cause the LLC to dissolve, if at all.
- Any business limitations in which the LLC will participate
The LLC-1 form must be signed by all of the LLC’s owners. Once you have included all of the requirements in the LLC-1 form, you can send it to: Secretary of State, Document Filing Support Unit, P.O. Box 944228, Sacramento, CA 94244-2280. You must include a $70 filing fee.
Registering an Agent on Behalf of the LLC
The LLC must choose a registered agent that will act on behalf of the LLC. The registered agent will accept certified mail and other essential business documents. The LLC must also register an office where the registered agent can typically be found during business hours. The registered agent does not necessarily have to be a person; it can also be a company who is registered in the same state as the LLC. The LLC, however, cannot be its own registered agent.
How to Prepare an Operating Agreement
Although not required in California, it is advised that you create an operating agreement for your LLC. Besides the Articles of Organization, the operating agreement is one of the most important business documents.
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