A Limited Liability Company (LLC), like the IX GLOBAL, is a popular choice among small business owners to enable them to maximize their liability policy, management flexibility, and taxation advantages this type of business entity often provides. Although forming a corporation is usually less demanding, there are some administrative and compliance steps to perform, as detailed below.
Choose an Area Where to Form Your LLC
Although you can choose to form an LLC under any circumstances – even if the LLC does not do business there – also most LLC owners choose to form an LLC from the state in which they want to do business – which in many cases is the state in which they reside. One reason is that if the LLC is formed in a state where it doesn’t do business – Delaware is the normal alternative for these LLCs – the LLC may have to register as a foreign LLC (also known as “Overseas Qualify”) to do business in the nation where it does business, which could increase administrative and formation costs. It is essential to keep in mind that LLC prices, taxes, and laws vary from state to state, making certain nations more valuable to certain small business owners. Read more about the best way to choose a country for LLC production.
Name Your LLC Business
To ensure you have access to the name you want for your LLC, whether or not it is registered as a DBA name, you will need to do an LLC name search on your state’s manufacturing website to determine if the name you want is available. However, if you are not prepared to document the formation of your LLC, it is a good idea to reserve the name. In many states, this is available for a small fee and a short period.
Look for a Registered Agent
Registering an LLC to conduct business in a foreign place requires having a registered agent in the state of formation or qualification. Most new business operators are either unfamiliar or ignore the purpose of a registered agent. A registered agent, also known as an agent for service of process, receives important legal notices and tax documents on behalf of an LLC.
These include important legal documents, records, and notices served by the Secretary of State (such as annual reports or returns) and tax documents served by the state tax department. Other court documents, such as garnishment orders and subpoenas, may also be served on the registered agent. If the registered agent is not available when these time-sensitive documents are sent, or if the person receiving them mishandles them, it can cause serious problems for the LLC.
Prepare an LLC Business Agreement
An LLC operating agreement is required in nearly every state. And while it may be oral in the vast majority of states, it is strongly recommended that every LLC have a written employment agreement. Even if you are the only member, you must acquire an employment agreement. This list will explain the branch of ownership, labor, and benefits and often avoids disputes between owners.
Among other things, it should detail who is responsible for what, what vote is required to approve certain transactions, how members’ interests can be transferred, how new members can be added, how distributions, losses, and profits are allocated, and more. It is highly recommended that your attorney review your employment agreement to ensure that all bases are covered. Read more about the issues an employment contract can address.
File Your LLC
Filing an LLC formation documents (or Certificate of Organization, Certificate of Formation, or Articles of Organization) is a necessity to make your business operations legal and official. An existing LLC must comply with the regulations of the Secretary of State’s office or whichever department handles business filings in the state in which you are forming. In the United States, in particular, filing fees vary per state.