Limited liability company formation is the process required for creating an LLC in a state. Every state has its own set of requirements for what is necessary to establish one of these legal entities.
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The first step is to come up with a name. Legally, every state generally will not allow you to use a name that is already registered with the state. These names include not just other LLC entities but corporations, partnerships, and sometimes even state filed DBA registrations. Spend the right amount of time coming up with a good name for your company and then check with the state to see if it is available for use as a limited liability company name. If you are using a reputable formation company, they will check and ensure name availability as part of the filing.

The next step is to decide whether you will serve as the registered agent of the company or whether you want to retain a lawyer or a registered agent service. If you are really cash strapped, then you can serve in this role as long as you have a permanent physical address in the state of formation where officially delivered documents (e.g., personal couriers) can be accepted and sign for during business hours. However, the better choice is to retain a good national registered agent services company to handle this for you and your business. This not only takes away the stress of compliance but also keeps your name off the publicly available registered office records. Many marketers tap this database and send a lot of junk mail.

All states require an acceptable name and a registered agent. Each state differs in what other information, if any, it requires as part of a limited liability company formation filing. It is important to check with the corporation agency in our state for the list of mandatory disclosures and the required formatting of the filing documents. Some states require the disclosure of members while others want a business purpose and principal office address. Every state allows for additional provisions to be included if desired by the company. For example, many companies want to include an indemnity provision to confirm protection of officers and managers.

Finally, the payment of a filing fee is part of every formation process. Fees can be confusing in certain states. This is because there is a standard fee and then potential add on fees. Add on fees usually are for faster processing. Processing time is very important. Some of the more popular states like California and Delaware have extremely long processing times if you just submit the standard filing. However, for a minimal expedite fee, you can get your LLC formed in just one or two business days.

You do not want to conduct any business or enter into any contracts until your limited liability company has been completely formed and a certificate of existence has been issued by the state. Why? Because your personal liability protection is based on the existence of a fully compliant legal entity. In addition, it is a nightmare to start conducting business in your own personal name and then trying to properly transfer such activity into an LLC that has been formed after the fact. It is done all the time as it is always better t