Last updated on October 11th, 2022 at 12:48 pm
When you start your own business, there are different ways you can start your company and diverse things to consider. One of these is whether you want to turn the business into a Limited Liability Company (LLC). This essentially means that your business becomes a legal entity and there are a number of benefits associated with doing this. The main advantage, as the name suggests, is that you will have limited responsibility when it comes to the company’s debts or liabilities.
If you have decided to change the structure of your business and form an LLC, it is important that you consider certain things before you go ahead with the process. In this article, we will advise you of what you should know about forming a limited liability company.
The Company Name
Coming up with the name for your company may not be exactly on your list of top priorities, but this is certainly something that you will need to carefully consider when forming a limited liability company. When you register your business, the authorities will check whether there is already a corporation of the same name. Your name must be unique and appropriate to your business and what you represent.
Register The Business
When forming an LLC, it is imperative that you register the company with the Secretary of State according to the local laws. Even if your business is mainly conducted online, you will always need an address to register it with. This will be the location at which your corporation should be registered with. Hiring employees and paying taxes requires you to fill out the SS4 form, and luckily you can file SS4 online. You also need to contact an agent who can advise you of the other paperwork you will need to file and the documents that are required from you in order for this to happen.Â
Consult With Professionals
There are a few legalities and regulations that you must abide by when developing a limited liability entity, which you may not entirely understand. Any errors can result in penalties or legal issues for you and your business. Therefore, it is imperative that you consult with the appropriate professionals in order to ensure the process goes smoothly. Setting up your business and ensuring that it is appropriately registered can be one of the most overwhelming tasks for business owners and there are incorporation service providers that can facilitate this process fully. Specialists recommend that IncFile can incorporate multiple types of entities, which means that you will certainly be able to get this support, no matter the type of business you are developing. Seeking support from other agencies means that you can focus on other aspects of your company.
Know Your Local Laws
As we briefly mentioned previously, you will need to register your company with the local authorities and the Secretary of State. It is very important that before you do this, you understand what the local laws are in regard to forming a limited liability company to avoid legal issues as the laws and requirements will differ from location to location.
The Company Officials You Need
You will require a set of different professionals when registering your entity. Firstly, you will need to appoint a company director, which could be yourself. You also should consider appointing an individual as company secretary, although this is not currently mandatory. When completing your corporation’s registration, you will need to identify all of the business’s officials and provide this information when you apply.
Think About The Structure Of The Shares
You will have to consider how the shareholdings in your new corporation are distributed and whether you will have different classes of shares. You can decide to own all of the shares yourself or share them with your partner or other individuals. It is important to note that when you claim dividends they must be as equally and proportionally allocated as the shareholdings. It may be a good idea to discuss this situation with an accountant so that they can recommend to you the most suitable way to manage your company’s share capital.Â
You Need Shareholders
As discussed above, your company will have shares that will need to be appropriately appointed to different individuals. These people will be your company’s shareholders, and they will all need to come together occasionally to discuss your company. The main outcome of these annual meetings is to fundamentally enable all shareholders to assemble and make decisions on the direction of the corporation, which will be greatly beneficial to lead your company in the best direction.
Forming your own limited liability company can be seen as overwhelming and cause certain issues. There are many things you need to know when going through this process. This page will give you an insight into the main things you should know about forming an LLC so that you can do this successfully.
