There are several reasons why LLC’s or limiated liability companies are the preferred structure for many organizations in recent years. Benefits include but are not limited to protecting the individual liability exposure for sole owners or multiple partners, taxation flexibility and reducing expenditure. With the help of professional service agents like Windsor Corporate Services, switching from an existing model to an LLC is easy and fast-paced, adding to its attractiveness.
Different steps to forming an LLC
The complexity of the company and the local regulations of the area your company is located in primarily govern the complexity of the task. In general, the following sequence of steps will have to be followed for the purpose.
- Choose your business name and initiate the process by obtaining required LLC Articles of Organization form
This form can either be obtained online or from the office of your Secretary of state. You will have to decide on a name for your business to fill up this application. So, do it after referring to the specific rules that apply to business name selection. Your chosen name should comply with the rules set by the state for companies.
- Publish a notice in the newspaper if required
This is a legal requirement in states like New York. You should do this before you file the Articles of Organization if it is mandated by the state where your company is located.
- Submit your articles of organization and pay the fees
Once the previous steps are completed, you can send your articles of organization to your Secretary of State with the required LLC setting up fee. There are certain factors to consider such as corporate tax which is required only in select cases. You will have to incur this expense if it applies to your business structure.
How can a professional help
The procedure of forming an LLC may seem simple as outlined in the above steps. However, it isn’t always easy to complete without the required guidance. It can also take up considerable amount of time and effort to do.
Apart from collecting the required documents and articles for the form submission, you may also have difficulty determining the correct fees and completing the paperwork. A professional expert like Windsor Corporate Services can do the entire task from end-to-end and also help you with ongoing support in this regard, once you form an LLC.
Another factor to consider is that although it isn’t compulsory, it is often essential to form an LLC Operating Agreement for the smooth functioning of your business. This is highly important if your business involves other partners. An operating agreement will clearly spell out the different liabilities, responsibilities and rights of all the stake holders in the business. This will eliminate the chance of confusion or discord if any issue arises in the future. The operational agreement can be drafted by an expert in the field, to contain all the relevant information and avoid scope for confusion should any issues arise in the future.