Starting a Small Home Business

Getting Started Forming Your Own LLC Business

October 28th, 2007 Filed under: Uncategorized — Small Home Business Author

If you own your own business or are thinking of starting one, the way the business is structured plays an invaluable role in how profitable and successful you will be. One alternative is by forming a Limited Liability Company or LLC. A business structured as an LLC can be a big step toward a successful business enterprise.

What is an LLC you ask? Well, simply put is a type of hybrid business structure that provides the limited liability features of a corporation with the tax efficiencies and operational flexibility of a partnership. They are a popular choice with single entrepreneurs that want to incorporate in order to protect their personal assets and secure additional loans if needed. Most business experts will be the first to tell that they are the easiest and least expensive form of ownership to organize.

LLC’s are similar to a corporation in that they have one or more owners and protect the owners’ personal assets from business debts and possible lawsuits. They cannot, however, issue shares of stock like a corporation can. Forming one is not a difficult task either but there are a few set regulations that must be followed. Here is how you can start your own LLC:

• Before you begin, you should get in contact with the LLC office within the state your business is based in. You can find it online under the website for the Secretary of State for your state since it normally is part of their office.
• Find and decide on a creative business name but make sure it complies with all of the LLC regulations of your state. It must end with a designator which indicates it is an LLC such as “Limited Liability Company,” “Ltd. Liability Co.,” “Limited Company,” “LLC” or “L.L.C.” You cannot use a name that is already on file with the LLC office for another business. The LLC office can help you with any questions you have concerning all of the regulations involved with choosing a business name in your state.
• Your name should not violate another company’s trademark. The U.S. Patent and Trademark Office can help you see if your proposed business name violates any trademark infringements of another company. You can be sued by the trademark owner if you use a previously copyrighted name that is registered with the federal government.
• Next, you’ll be filing the articles of organization and paying all of the required fees with the LLC office. These articles of organization are nothing but a simple form provided by the filing office at the LLC. You will also be listing a registered agent who would receive all legal papers if there is ever a lawsuit brought up on you in regards to your LLC.
• Now, you’re going to be creating an LLC operating agreement. This outlines the percentage of interest for each member of the LLC, their responsibilities, profit distribution and any other general information that will be in the LLC members’ agreement.
• Contact your local newspaper about putting in a notice that you are forming an LLC. This is actually a requirement in many states. After the notice has been in the paper for several weeks, you then file an affidavit of publication with the LLC office.
• You’re almost done; I promise. Finally, you’ll be getting all those things like permits and licenses, employer identification numbers, zoning permits, liquor licenses, export licenses or any other mandatory permits and licenses necessary.

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