Setting Up an LLC 5 Things Every Executive Should Know
Forming an LLC: Taking Your Business Idea to the Next Level in Los Angeles3 min read
As an executive in Los Angeles, you’ve decided to become an entrepreneur and take your business idea to the next level by forming an LLC or a Limited Liability Company. There are a few steps you need to take to make sure your business is set up correctly and the best way to do this is to speak to an experienced lawyer who understands the legal ins and outs that come with setting up an LLC in your locality, Los Angeles. Here are five factors you should consider when setting up an LLC in Los Angeles:
1. Choosing a Compelling Name
Picking the right name for your LLC is not only a branding step, but a legal one too. Check that the name you wish to use is distinct and unique from any other company that may already be registered. You must also make sure to include the words LLC in your name once it’s finalized, as this will alert your customers that you are a limited liability company. The California Secretary of State is the authority on local laws and they oversee the registration of your LLC name and make sure it’s accurate and compliant with the law.
2. Selecting a Unique Tax Classification
Tax classification rules differ from one territory to another and this is especially true in Los Angeles due to its population density. As an LLC, you are allowed to choose a classification you think fits best for the purposes of your company during the time of filing registration documents with the California Secretary of State. Your lawyer can help you decide which classification is right for you, whether it’s a partnership, a sole proprietorship, or a corporation.
3. Appointing a Registered Agent
When registering your LLC with the California Secretary of State, you’ll be asked to name a registered agent. This agent will accept legal papers, forms, and other notices on your behalf, so the individual should be close to you and available to respond in a timely fashion. You can appoint yourself, a fellow LLC member, attorney, or a commercial registered agent from a third party organization. Do make sure you’re liable for any and all communications that are sent your way.
4. Draft Your Operating Agreement
Your LLC’s operating agreement should be drafted and documented from the start. You can with the help of a good lawyer, fill out and file the necessary paperwork for your LLC. This document will lay out how the organization will operate, who will exist in it, and how finances will be handled.
5. Sign Up For the Necessary State and Federal Taxes
As with any business, you’ll need to register for federal and local taxes, and this can be done with the help of an experienced lawyer. The taxes you need to register for will depend on the size and nature of your business, whether you’re an individual or a corporate entity. You’ll need to set up business specific accounts and understand the differences between state and federal taxes and reporting.
When it comes to setting up an LLC, you need to ensure utmost risk management and compliance from the very start. With the right guidance from you lawyer who understands the local regulations in Los Angeles, you’ll be able to protect yourself, your employees, and your business from any potential liability.
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