Key Issues in Setting up An LLC
Very few of you probably like to work for a company that is not your own. Working hard for almost 8 to 10 hours straight every day just gives you the salary that you deserve. However, if you work the same for a small business of your own, you will get much more than your salary. It is true that an LLC or a limited liability company is a pretty popular business structure for any startup business.
These limited liability companies are formed in accordance with the state law. Such types of businesses have the advantage of providing limited liability protection for the businessmen.
Key Problems in Setting up An LLC
Although it may seem very simple, setting up an LLC is not that easy. You may have to face various issues, both major and minor before you can successfully set up your own limited liability company. Here are some of the key issues in setting up such a business.
- Choose The State Where You Wish To Start Your LLC: As discussed above, an LLC is formed in accordance with the various rules and regulations of the specific state law. Thus, the first hurdle in your decision of starting your own LLC is to choose the state where you wish to set up the business. Although you will come across several states that may have well-developed laws, it is always better to choose a state from where you wish to operate the business. This will save you plenty of complexities and fees.
- Give A Suitable Name To Your LLC: The next issue in starting your own LLC is giving the business a suitable name. This step will have several minor issues associated with it. First of all, the name you choose should end with either Limited Liability Company or LLC or any other permitted abbreviation. Secondly, the name chosen should be easily distinguishable from other active domestic and foreign LLCs filed with the Secretary of State. Lastly, the name chosen for the business should not contain some specific words such as incorporated, Inc., corporation, or even corp.
- File The Articles Of Organization Of The LLC: It is easy to understand that the LLC gets officially formed when the Articles of Organization is prepared with the Secretary of State. This article need to be easy and short. You will have to pay a filing fee and in some states, you may also have to pay a minimum annual tax.
- Analyze The Problems Related To Raising Money From Your Investors: If your future plans also include raising money from various investors, venture capital firms, and family members, you will have to deal with several hurdles associated with this step. You will have to remember that most of the investors, such as venture capital firms, prefer to invest in corporations and not limited liability companies. Issuing LLC units to various investors will naturally mean the application of state and federal securities laws. Thus, a good legal advice will be necessary for you and your LLC in this matter. Someone like LegalZoom, who provides all the legal solutions you may require in starting your own business or even to run the same. This law firm can help you with several legal matters associated with a business firm.
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About Christian Reynolds
Christian is the chief reporter, editor, and webmaster at Cleveland Leader. An aspiring news anchor, his hobbies outside of investigative reporting are golf, martinis, and adventure travel. If you have a scoop on any developing story, please contact him on this page.
