How to Form a Limited Liability Company

A limited liability company (LLC) is a legal business entity where owners have limited personal liability even if they participate in management.

To form a limited liability company:

1. Choose a name which complies with your state law for LLCs
2. Prepare and file Articles of Organization with your state LLC office.
3. Draw up the Operating Agreement among the owners.
4. Set up a bank account for the LLC.
5. Develop a financial plan.
6. Set up a record keeping system.
7. Insure the business.
8. Lease or purchase the place of business.
9. Lease or purchase any supplies and equipment needed.
10. Hire and train employees.
11. Open the doors for business.

Tips:

1. LLCs are a relatively recent business form adopted from international business models.
2. Only recently have LLCs become legal in all 50 states.
3. State and federal laws may not agree so legal advice is critical.
4. A Limited Liability Corporation is like a partnership, but more flexible and without the legal liabilities.