Tips on Creating a Limited Liability Company for a Small Business

Creating a Limited Liability Company

If you run a small company, you may be considering creating a limited liability company to shield yourself and your firm from any legal trouble. Before you go ahead and form a limited liability company (LLC), there are a few considerations you need to pay some attention to. These advantages of LLCs are significant. This blog article will walk you through the processes necessary to establish a limited liability company (LLC), as well as give some advice on how to get the most out of the business structure that you have chosen. Forming a limited liability corporation (LLC) for your small business is a crucial action to take if you want to shield your assets from business liabilities. The following are some suggestions for establishing and operating a limited liability company.

Choose the Right State

Although selecting the appropriate state is critical, it is not the essential step in creating a limited liability company. Because limited liability companies (LLCs) are not available in every state, you will need to research to see whether or not your state provides this business organization. According to, you need to make certain that the structure of your company caters to your requirements and aims the most effectively.

If you begin with a corporation built to fulfill all of your objectives but then select a state that does not get along well with that specific structure, you will run into some difficulties further down the line. Because developing your business plan is time-consuming, you should double-check that your company’s organizational structure is sound before moving on with the process. If you find that the finished product is not to your liking, then all of your efforts will have been in vain.

Name Your Company

When you decide to organize a limited liability company (LLC), one of the most crucial choices you will have to make is what name to provide to your business. You’ll have to decide on anything that complies with the laws of the state, but other than that, the ball is in your court! Do some research on existing limited liability companies operating in your state before deciding on a name for your own, and be sure to choose something that stands out from the crowd.

Visiting your state’s Secretary of State website is the most efficient approach to learning about the available options. Since the office of the Secretary of State is where companies go to register, you should feel confident in their ability to assist you. Your limited liability company must have a unique name, and that name may not include any terms that imply the company is a partnership or corporation.

Draft Articles of Organization When Creating a Limited Liability Company

These will contain essential information about the company, such as its purpose, the number of shares of stock that will be issued, etc., and the state where it will be registered to do business. There are a lot of templates available online that you can use as a reference, but before you do so, you need to check that everything is stated appropriately and that the language won’t contradict any other rules or laws.

You must not forget to add a sentence that states, “natural people shall hold all ownership interest.” This is an extremely vital part of the document. This rule prohibits using trusts and other legal entities that aren’t people. When you have your articles of organization and have filed them with the state where your business will be located (if you haven’t already done so), you can move on to completing some additional steps. If you haven’t already done so, you can move on to the next step once you have your articles of organization.

tips on creating a limited liability company for a small business

File the Articles of Organization With The State

Articles of Organization must also be filed with the state, and this may typically be done electronically via your Secretary of State’s website. As of right now, in certain areas, you can do it over the phone. After doing so, your firm’s name will be registered as an LLC, and you will be assigned a filing number. The new name may be used on any official papers in the future.

Articles of Organization may be filed at no predetermined fee. Some states impose the same flat price regardless of the number of shareholders or the presence or absence of minority shareholders, while others charge more. You may need to use an outside provider to draft your Articles of Organization, but this is typically not an issue unless you go with a law firm or similar premium service.

When starting a small company, the Limited Liability Company (LLC) is a good choice for entrepreneurs. Pass-through taxation is permitted, implying that only company income is taxed rather than personal income. The idea of creating a limited liability company provides another advantage in that it shields your assets from business debts. If you need assistance deciding on a suitable company structure, the Corporation Center is here to assist you. Call (800) 580-4870 to speak with an LLC expert.