When founding a business, you might easily overlook the legal aspect of the endeavor. However, it is important to ensure that a business is on the right side of the law from all angles. One important part of that is deciding on and registering the type of entity the business will be. This article will discuss one type of business entity in particular: the Limited Liability Company, or LLC for short.
Why Legal Labels Matter ?
From a partnership to an incorporated corporation, the labels given to businesses are always significant. Each label dictates how the business is run, how and whom it may employ, and even how it is taxed. With reference to that, here is what an LLC is:
The term “Limited Liability” describes what the purpose of the entity is. Every business structure has some level of liability. An LLC is designed to limit the effects of those liabilities by separating the corporation as an entity from its owners. Corporate business guides Boostsuite can provide a wide range of assistance with establishing businesses like this.
Founding an LLC
State laws differ on the requirements and regulations for creating an LLC, but here is a short overview:
Giving the LLC a Name
The name that the business will be registered with is key, because it is the name that will be put on the legal documents. Most LLCs also have and use a trade title, also referred to by its main highlight, “Doing Business As.” Businesses that choose to have the same official name and DBA do not need to register separately. In addition, there are restricted words that cannot be used in an LLC title or trade name and trademarks that must be respected.
The next registrar to visit is for the domain name. This refers to the virtual address that will be used for a website. Any good domain expansion will be easily linked to the company’s DBA and official name.
Filling Legal Documents and Articles
This is a simple step that only requires filling out an online form. The form will contain basic personal information like the names of the business, the founder, major parties, etc. This document is usually filed with a state-level Secretary of State.
The next item is called an operating agreement, which lays out the basics of how your business will function. This includes information about the percentage of control that each member will possess. Another requirement that varies by region is a public announcement. Some states even guide newly founded LLCs on how and when to publish an announcement.
Final Registration Requirements
Some LLCs require further licensing, depending on the type of business. For example, businesses that operate with chemicals or with live animals need additional permits, and so on.
A valid Employee Identification Number is an absolute must-have. This single document is the key to opening business accounts and applying for loans with banks. It is also important for taxation purposes. The final major registrar is with the local Department of Labour. Any LLC that has employees is required to do this in the best interest of those employees.
Starting an LLC is all about establishing its existence in the eyes of relevant government agencies. Once the LLC is a registered, recognized business entity, all other operations fall into place.
