By: Esqueda Law PLLC
After much consideration of how to structure your business, it seems the popular choice may be to form a Limited Liability Company (LLC). An LLC combines the features of a sole partnership which prevents you from double taxation, with the personal protection of assets that a corporation offers. But like with any crucial decision you make, don’t just run out and start without first planning.
Here are 3 things you need to know before starting an LLC
- The Official Name of Your business. In addition to being catchy and relevant, there needs to be thought, research, and legitimacy behind your business name. An online search can be done for businesses registered with the United States Patent and Trademark Office (USPTO), to avoid infringing upon any trademark names or registered names within your state, and by extension, in your line of work in the world. A local search may also need to be done for unregistered trademarks.
Include the term LLC at the end of your name and avoid terms like ‘Inc’ and ‘Corp’ for clarity over the nature of the entity as an LLC. Banks, trustees, and insurance companies cannot be LLCs and these terms should not be part of the name. You may also want to think of a name that has the potential to grow and is not limited by exact location or over-precise details in the title. Also, consider the availability of the domain “.com” with your business name of choice.
- The State in which business will operate. Since state laws on LLC vary, it is important to consider which state your business will be situated in, and what laws govern there. You must file the Article of Organization which is generally simple to complete. It includes your business name, delegated Resident Agent, and is accompanied by a filing fee. The Operating Agreement includes instructions on how profits and losses are to be distributed, who will manage and how the entity will be managed, what will occur in the event of the dissolution of the business, among others.
Additionally, to conduct business outside of your state, you need to file “Foreign Qualifications” documents in addition to the usual Article of Organization
- Will you outsource help or investors? Think of whether or not your business will need investors. Investors typically avoid LLCs since there is no liability protection for them. It is important to inform your potential investors of the risks involved in this practice. For this, it is advisable to outsource even further, in the person of an attorney so that the Articles of Organization of the LLC can include rights for the investor.
Other third-party partners may include a resident agent, who receives legal documents from the State, or a registered accountant.
An LLC doesn’t need to be formed by a large start-up team of attorneys and professionals. However, the articles and agreements outlining the operation of your LLC are best implemented under the trained eye of a business attorney. My name is Liza Ann Esqueda and I specialize in this field.
Need to strategize? Schedule a free constellation TODAY. Book a free 15-minute call: HERE Liza Ann Esqueda is a trademark & small business attorney specializing in trademarks, copyrights, and contract templates. Liza Ann runs a virtual attorney, serving clients nationwide. Visit: LawyerLizaAnn.com for business tips, free downloads, and course information.