The different business structures can be confusing. Forming an LLC can also be intimidating to a new business owner. LLCs are flexible by nature, but it is the same flexibility that can make creating your LLC challenging.
Furthermore, if you are thinking about starting a business, you may want to form an LLC for your new venture. Not all businesses qualify for the LLC structure , so it is important that you understand when and if you should form an LLC. An LLC is an abbreviated way to reference a limited liability company.
An LLC joins desirable features of a sole proprietorship , a partnership, and a corporation. The LLC structure was formed in the s to help small business owners minimize risk associated with their businesses. An LLC has the following characteristics:. In general, establishing an LLC is a multi-step process that includes:. While this name may vary from state to state, Articles of Organization allow you to establish your LLC in your state. Many states require you to designate a registered agent to form an LLC.
This agent is the business owner or member that represents the LLC and receives any legal paperwork in the event of a lawsuit. LLC fees vary from state to state. If you live in Arizona, Nebraska, or New York, you are required to publish a legal notice of intent in a local newspaper. These states may also require you to publish your notice of intent several times over the course of weeks or months, as well as file an affidavit of publication with the state.
If your business has multiple owners, it is critical to create an LLC operating agreement—even if it is not required by your state. This document details the rights and responsibilities of each owner, which provides a general framework to help deal with business conflicts or transfers of ownership.
While your operating agreement can be as detailed as you need it to be, it should specify things like voting power, percentages of ownership in the business, and more.
Forming an LLC not only gives your small business credibility, but it also allows you to protect your personal assets, gain access to unique tax breaks, and establish a centralized structure for your enterprise. Once you have your LLC established, you need a business banking partner to help you manage your finances. With Landmark National Bank, our suite of business banking services can help you keep your personal and business-related finances separate. Additionally, we provide unique tools like online cash management , merchant card services , business credit cards , and more so you can get all the solutions you need under one roof.
In an LLC, the business can be legally separate from the business owner. Ready to form an LLC? Use our Form an LLC guide to get started. Follow this link and then choose your state for step-by-step instructions. Form An LLC. You will need to provide your state with a unique name that is distinguishable from all registered names when you file your LLCs formation documents. Our Business Name Generator and our How to Name a Business guide are free tools available to entrepreneurs that need help naming their business.
You may already have a DBA name for your sole proprietorship or partnership that you will want to carry over to your new LLC. The steps for transferring or converting a DBA name vary from state to state. We recommend selecting your state on our Form an LLC guide to learn more about searching and registering your business name.
You may also need to contact your state for specific directions on how to transfer your DBA registration.
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