Deciding to start a Limited Liability Company (LLC) can be an exciting first step for your new business. But while it may the beginning of a promising financial venture, it is also important to ensure your protection down the line. In cases where businesses land in some sort of trouble, people may try to go after not only the money from your business but also financial resources from your personal life. Safeguarding your personal assets is therefore essential when you and your partners are first starting out. To ensure you are completely protected, it is always best to work with a legal team, but here are the first few steps of forming an LLC that you should be aware of.
Name Your Business
The first step to success is coming up with your brand’s name. While you may think that any clever name you come up with is fair game for your business, it may already be taken. When it comes to naming your business, there can be a lot of red tape. First, you must come up with a name that you and all of your partners agree on. Secondly, you must check for your name’s availability. If it is already registered, that means it’s back to the drawing board. But if you are lucky and the name is available, then you should go ahead and register the name. Most of the paperwork you complete for your business will be filed directly with the state.
Draft and Sign an Operating Agreement
The operating agreement of your LLC will be the main document that can protect you in the future. It contains information about all aspect of the business from ownership percentages to the voting rights of each member. In addition, it should be highly detailed, providing a complete list of all rights and responsibilities for each LLC member. The operating agreement oftentimes includes buyout rules as well, which detail a protocol for when one of the members plans to leave the LLC. Because this is the document that you and your partners will fall back on when disputes occur, you should make sure that the language is extremely specific and clear.
The Articles of Organization
This document has a purely administrative function. The articles function as a declaration or a charter which explains the details of your new business. More specifically, it should include information on your place of business, your business’s purpose for being, and stock information.
Securing Business Licenses and Permits
After filing all of your LLC paperwork with the state, you must also register your business’s presence with the remaining levels of government. This part may vary depending on the nature of your business, but ensure that you obtain all of the proper permits and licenses required by federal and local government.
The best way to ensure your LLC is compliant with government rules is to seek legal counsel. Call DeVries and Associates today learn more about forming your LLC.