How to Form your LLC with Stock Legal
Forming a limited liability company (LLC) can sound like an intimidating task as an aspiring entrepreneur, but never fear, Stock Legal is here to help walk you through the start of your company. We love working with small to medium sized early companies to figure out the best corporate structure to help you achieve your goals. If you’re a business owner who wants liability protection from business liabilities, a flexible management and tax structure, and a simple way to allocate profits and losses of the business, a LLC may be right for you.
Here’s a step-by-step outline and example for how to form a LLC with Stock Legal.
Pick a State to Form Your LLC
To form a LLC, you must file paperwork (usually called the Articles of Organization) with your state. Most of the time, you’ll file in the state where your business is located. However, if you do business in multiple states, you may have a choice of states to form your LLC.
Name Your LLC
In general, your LLC name can’t be the same as another business entity in your state. In addition, you must use a business designation such as “LLC” or “limited liability company” at the end of the name. We also should not forget trademark – if building a brand is important to your business, talk with us about a trademark search and filing!
Choose Registered Agent
You must choose a registered agent, with an address in your state, to receive lawsuits and official documents on behalf of the LLC. You can name a member or employee to act as agent or you can employ a registered agent company.
Prepare an Operating Agreement
The Operating Agreement is an agreement which governs the management of the company, the rights and obligations of its owners, the way profits and losses will be divided, and many other important rules the apply to the business. This is arguably one of the most important agreements you will sign as a business owner, especially if your LLC has multiple members. (Curious about why operating agreements are so important? Learn more here.)
Prepare and File the Articles of Organization
This is the main document that you’ll file with the state to create your LLC. This document must include the name of the LLC, the name and address of the registered agent, as well as some other information (often dependent upon the state of formation). Once the LLC has been officially formed, you will receive a certificate from the state. At Stock Legal, we make it easy to form your entity by filing your Articles of Organization in the proper form customized to your business.
Publish a Notice
In a few states (as of now only New York, Arizona and Nebraska), you must publish a small newspaper notice of your intent to form a LLC.
Obtain an EIN
Once your LLC is official, you’re then able to obtain a federal tax ID number (EIN) and set up a business bank account.
Once you’ve completed the above steps, congratulations, you’ve finished setting up your LLC! You have now gained important protection for yourself and your business.
If this still seems a bit overwhelming, we’d love to help walk you through this journey.