Registering as an LLC: Everything You Need to Know
Registering as an LLC is the process of forming an LLC, or limited liability company, and having it officially recognized by the state it is formed in. 3 min read
Registering as an LLC is the process of forming an LLC, or limited liability company, and having it officially recognized by the state it is formed in. There is a simple, multi-step process for doing this, and although it may vary in the details from state to state, it is essentially the same in every state. To get an LLC registered, one must select a name and registered agent for it, as well as file Articles of Organization with the Secretary of State. Depending on one’s business situation, additional steps may be needed, as well.
Naming Your LLC
Naming your LLC is the first step towards registering your LLC. You can choose a name that relates directly to your company, like “Pizza Hut,” or a name that is more about the idea of the company, like “Google,” but in either case, the following naming rules should be followed:
- The name should be original; not a copy of another registered LLC’s name.
- The name should have “Limited Liability Company,” or some variation of that term, in the name.
- The name should not have forbidden or restricted terms in it unless authorized to do so.
Some states may have additional regulations, but these are the main ones to keep in mind. Conducting an LLC name search through your state’s LLC name database can show you if the name you want is available or allowed in your state.
Acquiring a Registered Agent
No matter what state your LLC is to be registered in, it must have a registered agent. A registered agent serves and receives legal papers on behalf of your LLC. Such an agent may be an individual or a company, but in either case, the registered agent must be a resident of the state or be cleared to do business in the state. Also, a physical street address in the state is required.
Publishing a Public Notice
Some states will require you to publish a public notice in your local paper stating your intent to form an LLC. This must be published several times in the weeks leading up to your filing of the Articles of Organization. Upon completing this step, the LLC filing office will need to receive an affidavit of publication from you. Your local newspaper should be able to help you with the publication process.
Filing Articles of Organization
The Articles of Organization officially register your LLC with the state. They are simple, informational documents that can normally be completed in a few minutes by checking boxes and filling in blanks. They will contain such basic information as:
- Your LLC’s address and name.
- Your registered agent’s address and name.
- Your name and signature, and in some states your registered agent's name and signature.
- Your LLC’s length of existence, if it is not to exist in perpetuity.
- Your LLC’s business purpose (what type of business it is in).
The Articles of Organization will be filed with the Secretary of State in most states, and this filing will be accompanied by a filing fee. The average cost of this fee is $100. Once the state processes your filing, your LLC will be officially registered, although you may have to complete some more tasks before you go into business.
Creating an Operating Agreement
One optional but highly recommended task for LLC creation is creating an operating agreement for your LLC. An operating agreement is an internal document that defines the organization and policies of your LLC. Depending on your business needs, it may be a simple or very complex document. Some topics that may be covered by it include:
- The LLC’s management structure (member managedor manager managed).
- How distributions will be made to the LLC’s members.
- How voting will be handled by the LLC’s members.
- How transference of LLC membership will be handled.
Advantages to having an operating agreement include:
- Structuring and running your LLC in a way that best suits you instead of being bound by your state’s default rules.
- Strengthening limited liability by further defining the separation between the LLC and its members.
- Avoiding future disputes amongst members by clearly defining how the LLC will be run.
Obtaining Permits and Licenses
Some businesses may need to acquire permits and/or licenses before they can legally go into business. These may include an EIN (employer identification number), business license, zoning permit, or sellers’ permit. The U.S. Small Business Administration maintains information on all permits and licenses.
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