How to LLC a Company
If you want to LLC your company, you have to find out the rules and regulations in your state or country.
Prepare the needed documents and settle other requirements. If you think that this is the best option, form the LLC today.
Before you decide to form an LLC out of your company, there is a need to know what it is all about. LLC stands for Limited Liability Company and its routine activities are similar to that of partnerships but the main difference is that it has limited liability like that of corporations. You have to form this organization in the state where you are planning to operate.
There are many advantages of forming an LLC. This includes –
- limited liability
- flexible distribution of profit
- no minutes
- you get to avoid double taxation
The liability protection that you can enjoy is just like that of corporations. The members of the company will not be liable for any debts or other problems unless they’ve given their personal guarantee. Basically, the company is still a partnership and so it doesn’t entail any resolution or minutes. You will find it easier to operate as well. You also get to avoid double taxation since it flows through the LLC.
LLC has a limited life because if a member undergoes bankruptcy or dies, the company is dissolved. Going public is not welcomed by most business owners and so a thorough plan is required. In the case of partnerships or sole businesses, there is less paperwork. However, when you form an LLC, you can be classified in any of the business forms and so you will have to deal with the added complexity.
Forming the LLC
It is not that hard to form an LLC. The first thing you have to do is choose a name for the company. You have to make sure that no other company is using the same name. You can check with the regulations in your state or country so that you can avoid potential mistakes.
There is a need to create the Articles of Organization and you have to file the necessary paperwork. During the filing process, there is a fee that you need to settle. You have to lay out the responsibilities and rights of members, for smooth future operation. Find out if you need to publish any notice that your company is forming an LLC. There are many legal requirements that you have to address. You need to obtain licenses or permits that will suit the business that you’re running.
Now that you know how to LLC a company, you can start with the documentation and necessary paperwork. It might take some time before you get straighten things out and you also have to prepare for the transition.