Step 1: Naming the Business
- What must be in the name of an LLC? Section 105 of the Uniform Limited Liability Company Act states the following:
(a) The name of a limited liability company must contain "limited liability company" or "limited company" or the abbreviation "L.L.C.", "LLC", "L.C.", or "LC". "Limited" may be abbreviated as "Ltd.", and "company" may be abbreviated as "Co.".
Some states have slight variations upon the above restrictions so it is best to check your state law before selecting a name. Also, in some states, licensed professionals--such as doctors, lawyers, and accountants--must set up a "professional LLC" instead of a standard LLC. The easiest way to determine the peculiarities of your state law regarding the name is to look at the instructions for the form articles of organization issue by the secretary of state (or analogous government office). Click on the link to your state at the top of the right column on this page for additional information.
- Checking to ensure that the name you have selected is not already in use by another organization in your state. Next, one must ensure that the selected name is still available with the state you are to organize and, also, any state in which you are going to do sufficient business to justify registering as a foreign LLC. Generally, for small and medium sized companies, one only registers to do business in a state other than where organized if the LLC sets up a business office in another state. You can check name availability by calling the secretary of state's office or, in many states, querying their online database. You also may want to reserve a name for future use if you do not plan to immediately file your articles of organization. The state links in the right column take you to a forms page; however, you should be able to find telephone numbers and/or an online database for name availability searches from the state forms page.
Step 2: Articles of Organization
- Getting the proper form. The links at the top of the right column take you to the state corporate forms page. You are looking for "Limited Liability Company Articles of Organization". It is a good idea to look for a fee schedule and contact telephone numbers. A few states, such as Maryland, the District of Columbia, and North Dakota do not have a proscribed form; however, they will examples online of what your articles should look like. In such a case, download the "example" and following it verbatim. Do not skip questions unless they are marked as "optional". The following are direct links to the New York LLC Article of Organization and California LLC Article of Organization.
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Sample LLC Operating Agreement
Links To State Corporate Offices
LLC Forms and Filings
Step 2: Articles of Organization, cont.--
Registered Agent. In most states, one must list a "registered agent" with an in-state address in the articles of organization (i.e., the registered agent has to be located within the state). The "registered agent" is merely the person designated by your LLC to receive official documents from the state and service of process should the LLC ever be sued. Thus, if a member of your ownership is serve, make sure you have a responsible person designated. Also, there are registered agent services that can act on your behalf and may be located through any major search engine using the search term "registered agent service". Please note that a registered agent does not have to be an individual but, also, may be a corporation.
LLC Organizer. This is typically a member of the LLC ownership group but does not have to be. Anyone authorized to act on behalf of the initial LLC members may act as the organizer. By signing the articles of organization as the "organizer", you are merely giving an oath that the information in the articles is true and correct. There no real liability, on-going duty, or other significance attached with being the organizer.
Years of Existence. The vast majority of LLCs created select a "perpetual" existence with no stated date of termination. There are rare circumstances where a minority member may wish to have the life of an LLC limited; however, please seek legal counsel if you are exploring this option.
Managers. An LLC's daily business operations are conducted either by the LLC members themselves or by designated "managers" (who may also be LLC members). An LLC member may also be a "manager". The LLC "operating agreement", a document separate and apart from the "articles of organization" controls the relations between managers and members should members be appointed. If no managers are appointed, then the LLC members, as a whole, must make and approve of all operational details of the LLC. Please see "Page 2" hereof for additional information about LLC Operating Agreements and the use of managers.
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