Own LLC: Everything You Need to Know
When you want to own LLC businesses, there are some important considerations you need to make. For instance, will you own the business yourself or with others? Do you need liability protection? These are all very important aspects to an LLC.3 min read
When you want to own LLC businesses, there are some important considerations you need to make. For instance, will you own the business yourself or with others? Do you need liability protection? These are all very important aspects to an LLC.
Who Can Own an LLC?
A limited liability company, also known as an LLC, is one of the most flexible types of business structures you can choose. The owners of an LLC are called members. An LLC may be owned by one person, a group of people, or another business.
Although LLCs are state-governed rather than federal, most states have the same amount of consistency with regard to the law.
· May own an LLC. A single-member LLC is common and will offer liability protection unlike a sole proprietorship.
· Does not have to be a resident in the state where the LLC is formed. He or she has to select a person that lives in the state to be a registered agent.
· Does not have to be a resident of United States
· May be any age. Although, it can be difficult to own an LLC under the age of 18 since minors are not allowed to form a legal contract.
· Of two or more people can own an LLC
· Does not have to put an equal amount of capital in the business. The members may divide ownership any way they like.
· May have both new and old members come and go without disrupting the business of the LLC.
· May own an LLC. This includes a corporation or other LLCs.
· Will govern the business for the purpose of dividing the assets and liabilities among these subsidiary businesses.
There are some restrictions to consider. Some states will have special requirements for some LLCs. For instance, a professional LLC requires certain licensing being held by those working in that field. This includes doctors, lawyers, any other professional occupation that requires a license. A business can also impose its own membership restrictions, but they can be amended.
How to Form an LLC
There are some challenges to deal with when you start a new business. If you really want to take the correct steps right off the bat, you need to make sure that your business is legally formed. Forming an LLC protects your own personal assets from any lawsuit stemming from your business.
There are also some tax advantages when you form an LLC, including pass-through taxation. This helps you avoid any double-taxation. Also, LLCs help provide credibility with your clientele.
It is not difficult to form an LLC. Just follow these steps:
1. Pick a name for your LLC. The name has to comply with the laws of your state. Although the requirements are going to be different in each state, in general they cannot be the same as another LLC on file. The name also has to end with an LLC designator. Your name also cannot include any words that are prohibited by your state, including the words bank, insurance, city, or Corporation. The LLC office in your state can tell you if your name is available. You have the option of reserving your LLC name for a period of time for a fee.
2. File your articles of organization. When you decide on a name, you need to file your articles of organization with your state LLC office. It’s also known as the certificate of formation, or a certificate of organization. An article of organization is a very short and simple document that you can prepare yourself. It will need your LLC name, the address, and the names of all the members. You also have to pay a fee set by your state.
3. Next, you need to create an operating agreement for your LLC. Although an operating agreement is not required for state filing, this sets out the rules for the ownership and operation of your business. It should include pertinent information including the percentage of interest of each member, the rights and responsibilities, the division of earning power, the allocation of profits and losses, how the business is going to be managed and rules for meetings.
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