If you are in the process of setting up an LLC, the one thing that you want to do is make sure that you are setting it up right. If you are not setting up an LLC the right way, one of two things will happen. The first thing that will happen is that your LLC will not be recognized as a business entity, which means you will not be doing business as soon as you planned. The second thing that will happen is that you will waste a ton of time and money trying to set up your LLC.
The first thing that you will want to do when setting up an LLC is to fill out and file your Articles of Organization. Of course, before you can fill out the Articles of Organization you will need to select a name for your business, make sure the name fits the guidelines for your state. The Articles of Organization are required by each state, so once you have filled them out they will need to be filed with the Secretary of State’s office. When filing the paperwork you will also need to pay a small filing fee, which will vary based on what state you live in. Some states will also require you to pay an annual corporate tax, which will be due at the time of filing.
Once this is done, you will want to create the LLC operating agreement for your business. The operating agreement is just as important as the Articles of Organization, if not more important, even though it does not need to be filed with the state. You want to create an LLC operating agreement because it will outline how your LLC is going to be run; this includes the managerial and financial rights and responsibilities of each LLC member. The operating agreement needs to be kept on site at the principal place of business, so that if it is ever needed it is easily accessible.
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