There are decisions to make and several steps involved when it comes to forming a business. LLCs are the go-to choice for many, combining the flexibility of a partnership with the liability protection of a corporation.
Before you get started, you will want to start a file or a 3-ring binder, to keep things organized (you’ll thank us later). This is where you will keep your Minute Book (consisting of your business plan, evidence of filed Articles of Organization, LLC Agreement, Membership Roster, copies of Membership Certificates, EIN confirmation, Resolutions of the Managers/Members, and more). Once the company is formed, stay organized with an LLC Kit, which contains customized membership certificates, membership roster, minute book binder, binder sleeve, company seal, sample minutes and LLC agreement.
Here are some of the decisions you’ll need to make and steps you’ll want to take:
- Determine where your company is to be formed. All companies must register in the state(s) in which they will conduct business. Many choose to incorporate in Delaware and register for the authority to conduct business in the states in which they will conduct business. The reasons include the business-friendly environment of the highly respected Delaware court system, the legislature, and the Division of Corporations, which operates more like a business than a bureaucracy.
- Choose an available name for your company. In addition to checking for availability at the Secretary of State’s office, you may also want to search for domain name availability and to search for any obvious trademarks.
- Decide on the company’s management structure – will it be managed by members or by managers who are elected by the members?
- Have an attorney draft (or at least review) the LLC Operating Agreement, paying very close attention to the details. This crucial document governs the internal rules, regulations, and operations of the business. Once nailed down, have ALL members (i.e. shareholders/owners) sign it.
- Form the LLC by filing the appropriate organization/formation document with the Secretary of State’s office.
- Once you receive confirmation of filing, obtain an Employer Identification Number from the IRS irs.gov.
- Be sure to print your EIN confirmation & record the EIN in a safe place, like your Minute Book.
- Adopt resolutions to open bank account. You will need to present your photo ID, filed Articles of Organization, signed Resolution, and EIN confirmation. All signers should be present to sign the signature card. Check with your bank to make sure they do not need copies of any other documents.
- Register for the authority to conduct business in each jurisdiction in which the company will operate, other than the one in which it was formed.
- Obtain your business license and register your company with the Division of Revenue/Taxation, Division of Labor and with the Worker’s Compensation Department. Some states offer One Stop Business Registration and Licensing.
- Obtain any necessary permits as may be applicable to your company’s specific operations.
- Contact your county & local government offices to determine if any county/city licenses are required or if they have any other special requirements for your type of business.
- Now you’re ready to sign the lease, hang the sign, and open the door – Congratulations!