Wednesday, 13 April 2016

Frequently Asked Questions about Forming and Running and LLC

Starting a Limited Liability Company (LLC) can be an intimidating process even for seasoned entrepreneurs, hence the need to answer some of your concerns. Here are some of the most frequently asked questions about LLCs.

Is an attorney essential to form LLCs?

An attorney is a very useful resource when you form llcs because they have a lot of experience and knowledge about the rules and regulations that govern this industry. However many states have made the process considerably easier and you can fill out an online form to start it off. You will get official communication through the mail to confirm the process of your application.

Do I need Articles of Organization?

Yes you do because this is one of the critical steps when creating an llc. In fact this is one of the stages in which your attorney will be invaluable. Note that there are states who call it a “Certificate of Organization” but it means that same thing.

Do I need an Operating Agreement?

Yes it is one of the documents that will be required before you create an llcs. It is useful to keep a checklist of the things that you need to do and the materials that you require. This will ensure that you do not leave anything vital out.

Are there restrictions on certain names?

Generally you can use any name that you want when you form llcs as long as it is available. There are checks that are done within the state to ensure that there is no duplication. However in most cases you can easily get round this by changing a few words in your selection as requested by the authorities. However you need to add the designation “LLC” at the end in order to distinguish it from other types of companies.  

Do I have to keep and share records after forming the LLC?

Yes you have to do because there are very strict requirements on those who are in the process of creating an llc. Some of the common records that you will need to keep include minutes of meetings as well as the financial reports. Remember that you still have reporting requirements for certain state agencies like the IRS.

How much will it cost me?

There is no definitive list of the costs when you create an llc but there are some basics that happen in virtually all states. First you need to pay a filing fee which is anything between $50 and $200. The attorney’s fees (optional) can run up to $500 per case. They may even charge you an additional $100 if you opt to have an operating agreement written up by them.

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