Starting,Limited,Liability,Cor business, insurance Starting a Limited Liability Corporation: Making the Right D


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Are you looking into starting a limited liability corporation? If so, you need to think through some basic questions before you commit to your corporate structure. Your structure has implications for taxes, exit strategies, personal income tax, as well as ownership. If you select the wrong structure, you might find yourself requiring an attorney to unwind the mess for you. In this article, we will be going over the top three considerations when starting a limited liability corporation. First, you need to select a name for your new entity. Seems simple right? Often times, if you are a service organization this might be very easy. For some, this will be a little more difficult as you will want to consider brand and trademark decisions and their long term viability. Typically an LLC will be in the form of Company Name, LLC. The best way to go about selecting a name is to sit down and identify your target market. Then, select a name that speaks directly to your customer. Try to make the name “sticky” so they remember what it is you do. After you have your initial list, it is time to sit down and research the availability. Most states now have an online site where you can search the availability of each business name.  After you find a business name that suits your  needs and market register it online. You can also register “dba” or doing business as names later if you want that are attached to your LLC. Second, you need to create and Operating Agreement. If you are the only member in the LLC this will more than likely be very easy. The Operating Agreement defines the financial and working structure of your organization. This is very important. In your Operating Agreement you will define what each members stake in the company is, as well as financial arrangements related to bonuses, rights, and responsibilities. You absolutely need an Operating Agreement with your partners and other members to limit your liability and have a common framework for defining the structure of your business. Don’t skip this step and use a boiler plate template. It is ok to start with a boiler plate but is important you sit down and hash out all the details before you create the formal legal documents submitted to the state with your LLC application. The third step prior to filing your LLC application and paperwork with the Secretary of State is to prepare your Articles of Organization. The Articles of Organization list the principal place of business as well as the nature of the business and the members. Each member will sign the Articles prior to submitting the formal entity. It is crucial that you take this opportunity to start your business on the right foot. Taking the time in the beginning and thinking through the issues with your partners will resolve future confusion and turmoil. Take your time and really think through what your future organization will look like and make sure your Operating Agreement will support your current and future plans for success.

Starting,Limited,Liability,Cor

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