Missouri Limited Liability Company Act
The Missouri Limited Liability Company Act outlines rules and regulations for establishing and operating a limited liability company (LLC) in this state.3 min read
The Missouri Limited Liability Company Act outlines rules and regulations for establishing and operating a limited liability company (LLC) in this state. You should be sure to understand the rules of the Act before you begin the process of forming your LLC.
Missouri LLC Basics
LLCs are a type of business entity governed by state law. The Missouri Limited Liability Company Act governs LLCs formed in the state, and you can find the specific rules of the Act in the Missouri Revised Statutes. Stockholders are the owners of corporations. The main role of corporate stockholders is to appoint a board of directors, which is a governing body that directs the operations of the company. In LLCs, company owners are called members. Instead of electing a board of directors, LLC members appoint managers to run the company. In many LLCs, members serve managerial roles.
LLCs were created to combine the benefits of partnerships and corporations. For instance, just like corporate stockholders, LLC members cannot be held personally liable for the debts to a company. Limited liability companies are similar to partnerships in that they both offer flexible ownership and management structures.
Creating a Missouri LLC
Naming your LLC is the initial step that you must take if you want to form a limited liability company in Missouri. When naming your company, you should be sure to include one of the following phrases or abbreviations:
- Limited liability company
- Limited company
In your company's formation documents, you will need to include a purpose for your LLC. Your listed purpose can be as vague or as detailed as you wish. For example, some LLCs simply list their purpose as conducting legal business. LLCs in Missouri must appoint a Registered Agent. You will need to include your agent's address and name in your formation documents.
Another important part of forming your LLC is deciding if your company will be managed by company members or by a professional manager. Whichever option you choose, you will need to list your management structure in your Articles of Organization. In your Articles of Organization, you also need to list how long you plan for your company to last. Since LLCs can last forever, you could list the life of your company as perpetual. Finally, you need to provide the name and address of the person organizing your company. Depending on the nature of your business, you can have a single organizer or multiple organizers.
When filing your Articles of Organization in Missouri, you will need to pay a filing fee of $50. If you decide to pay with a credit card, you will also need to pay a convenience fee.
Your LLC will legally exist after you have filed your formation documents, although there are still a few more tasks that you will need to accomplish before you can begin doing business. For instance, your company needs a business bank account, but before you can open your account, you will need to draft an Operating Agreement and obtain an Employer Identification Number (EIN) from the IRS.
An Operating Agreement is one of the most important documents that your LLC will possess, so you must be sure that you're very careful when drafting your agreement. Some of the topics that your Operating Agreement should cover include:
- How you will structure your LLC.
- How you will distribute losses and profits among members.
- Responsibilities and rights of members.
- How the LLC will be managed.
- Provisions for transferring ownership.
After forming your LLC, there are certain ongoing obligations of which you should be aware. Some of your company documents, for example, must be kept at your registered office and should be available for inspection whenever requested.
Missouri LLC Myths
One of the biggest myths related to Missouri LLCs is that company members enjoy unlimited liability protections. While LLC members do have protection from the actions of the company, they can still be held liable for their own negligence. For instance, a company member could not use the protections of the LLC to avoid being held responsible for fraud. If you are an LLC member and personally guarantee a loan granted to the company, you can be held personally liable if your company defaults on the loan.
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