7 Tips for Starting a Limited Liability Company – 2020 Guide

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A limited liability company is a flexible and extremely popular option for many small and medium-sized businesses. The process for starting and registering your business is relatively simple, but there are some things you must do in order to get approved by your state.

Use this 2020 guide to learn the first necessary steps for starting a limited liability company with ease. Go through each and every one of them and depending on your type of business and your needs, you can adapt them so you can finish the whole process easier. In case you get stuck, or if you don’t know how to proceed, you should contact an expert and get their professional opinion.

1. Name

Source: CorpCo

This is the easiest and probably the hardest of all the steps. You need to choose a name for your LLC and you need something that will be easy to remember, unique and something no one has ever used before.

First research and see if any words are not allowed in your state, and choose something that will not be rejected by Google when you make your website. You can look for words that are not allowed to be used in Google Ads, and stay away from them.

Then you can go online and look for existing company names. Here you can get some inspiration, and at the same time, find out what is already taken.

Once you choose the name you want, you need to register it. Depending on the state you are in, you need to file the needed documents and wait to get approved.

2. Statutory agent

Source: Ohio Department of Insurance

Choosing a registering agent is something you should do before you register your company, as this is one of the most important people for your business. This agent will almost be like your lawyer, even though the person does not have the same function. They will handle all the things, including lawsuits and subpoenas in your businesses’ name.

They will act as the middle man between you and the other party, and they will handle most of the law-related issues. You should do some research before you choose the statutory agent, and find one that has the needed experience and whose rate fits your budget.

3. Organization Form

Source: Small Business Trends

This part is closely related to the things you have already done. You should compile all the files that you have for your LLC and submit them. The form must include the name of your business, the purpose, the statutory agent, and you should also name the existing members. Don’t forget to put in the address and the length of existence.

In this part, you don’t have to specify anyone’s position and you don’t have to worry about the job titles your coworkers are going to have. This is something that you can leave for later, and now you only have to write down the names, and other information, about the people who are going to work with you.

Since this is the most complicated part of the whole process, you have to make sure you do it correctly. According to toptenwebhostingsites.com, many people make mistakes in this process and they end up losing time and money. So, to make sure that everything is done without further delays, you may think about consulting with an expert or hiring a third-party company that will get all of the things done instead of you.

4. Operating agreement

Source: playworksonline

This document should describe how your company is going to function. In this agreement, you should write down who is in charge of it, who gets a vote, and which people don’t have any rights.

Here you should go into details about most important things, including meetings, profits, losses and you should even write down what is going to happen if one or more of the voting members leave the business. You should specify what is going to happen to the LLC in case it bankrupts and the way things are going to be settled or dismantled.

No one wants to think about these things, but it is better to have these things in writing in case the worst happens. Some states do not require you to file this document, but you should have it so you have some basic guidelines on how you are going to run the LLC.

5. Certificate

Source: Northwest Registered Agent

After you file every single document, and after you get approved you need to get a certificate for your LLC from the state. Without this document, you won’t be able to proceed further. This is the document that will allow you to get a bank account, the needed licenses, and an ID.

Depending on the state you live in and on the fact if your initial documentation is fully completed, you should get the certificate in 10 to 30 days.

7. Publish a notice

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Publishing a notice in a local newspaper is required in some places. So, do your research and check to see if this is something you should do. When you do this, you need to state why you want to form an LLC and give information if you’ve received the certificate. At the moment, this part is only required in the state of New York and in Arizona.

Experts suggest that if you don’t have to do this step, you shouldn’t. It will only cost time and money, and it won’t make much of a difference unless you are required by law to do it.

8. Expanding

Source: ceorestoration

These are the most important steps you need to take so you can legally form a limited liability company. After you’ve registered it in one state, you can take things further and register it in other ones. The paperwork you’ve previously done is going to be similar for every state, so you should never throw away or delete copies of the documents you’ve filed. Know that every state requires a different statutory agent, so choose the right people as you expand your business in different places.

Do things slowly and take one step at a time. This is one of the most important things you will do in your life, and you have a chance to make your own successful brand that can make you a lot of money. Recheck everything and if you are not sure how to proceed or if you want everything to be done perfectly, hire a service that will get things done on time and without any mistakes.

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