How to Form a Limited Liability Corporation
Are you planning to set up a business and you would like to learn on how to form a Limited Liability Corporation?
The process of forming a Limited Liability Corporation is quite complicated if you have no sufficient learning, in relation to this we will guide on how to make the process easy for you.
Things to Consider in Forming a Limited Liability Corporation
In setting up the right business structure, it is very important for every business owners to familiarize first the system before deciding to apply such entity to their company. Each business entity (sole proprietorship, LLC, corporation, and partnership) has different requirements as well as advantages and disadvantages, particularly to the Limited Liability Corporation or LLC. The Limited Liability Corporation (or should be expressed as Limited Liability Company) is an acceptable business entity in the United States today.
There are some misconceptions about LLC. A Limited Liability Corporation features both structures of partnership and corporation; however, it is not a partnership or a corporation by nature. Since the entity is owned by more than one person, they are called as “members” and can’t be considered as “shareholders”. In terms of advantages, LLC enjoys liability protection as of a corporation which means that the members can’t be liable to any debts of the company except if they signed for it. An LLC also benefits from tax privileges and easier to operate as well. On the contrary, LLC has disadvantages also like it can be dissolved any time if a member dies or due to bankruptcy.
How to Form a Limited Liability Corporation in Few Steps?
In the United States, all of the states are accepting applications for the establishment of an LLC. Before you apply, business owners should have a concrete business plan just to make sure that the business will have a strong foundation. If you are still not familiar about the process and the regulations might be different from any states, the secretary of state’s office is the right place to get the vital information you need. Get all the requirements as specified by the state and learn the existing laws that govern on LLC’s. As soon as you have accustomed with the rules and regulations and you think that it’s the right entity for your business then proceed on the submission of the requirements. Fill-up the necessary forms and ask for the fees. By the way, the secretary of state will require you to submit the Articles of Organization and the Operating Agreement. The Articles of Organization can be prepared by a lawyer if you can’t do it by yourself; while the Operating Agreement is not as essential as the articles but it is still advisable to prepare it. Choose a good name for your company and register it to your state. In some states the forming of an LLC is being advertised in a newspaper, so better ask your state for other information for the approval of your application.
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