Need for LLC was felt a couple of years back when businesses found they had problems in the corporation. This induces Courts to enforce some basic modifications and alternations that allows partnerships type direct management, voting rules, and financial sharing.

LLC is a combination of both partnerships and corporations with some flexible rules and flow-through taxation.  In other words, it is “partneration”. It also started as the offspring of partnerships and Limited partnerships, with the addition of Limited Liability solving many of the businesses “chicken-egg” problem with the establishment of LLC law. It set up a sizeable constituency of lawyers and business people who provide support and offers clarification and refinement.  In fact, state legislatures and bar committees have also adapted LLC statues to overcome many current business issues. For instance, Some LLC statutes reduced the partnership rule allowing only members to dissolve or exit.

So LLC became a most viable option of many businesses, Just as it took over the close corporation and limited partnership form, change in the business condition could also cause it to be replaced by some new or hybrid forms.  However, in the current scenario, if you are also one among millions who want to run your business entity, experts advise that you should start with LLC as you do have to go through formalities. You can form your LLC online which is a most viable and smart way to set up your business as LLC.

Following are some of the issues that you need to face while setting up your LLC.

Naming of LLC

After selecting the state where you want to set up your LLC, the next step that you need to take is to register your name. But you have to remember that the name which you have chosen should unique. Secondly, the name needs to end with “LLC”, Limited Liability Company,” or some permitted abbreviation. It should not contain terms that the state prohibits, like bank, trustee or insurance company. The name also should not contain the words corporation, inc., incorporated, or corp. This ensures that the LLC is not confused as a corporation. You also need to do a trademark search to make sure that you do not violate any other party’s trademark. Picking a better name is not easy, and equally difficult is getting the requisite domain name. Besides, you also have to pay for getting the domain name.

Filing of the LLC Articles of Organization

As LLC is officially formed when you file an “Articles of Organization” with the Secretary of State. There are some criteria that you need to meet:

• Keep your Articles of Organization short and easy.
• Designate a “registered agent” for the LLC- someone who is authorized and legalized to receive your legal documents.
• Pay a filing fee, while in some states it is around $ 100 while in others, like in California, a minimum annual tax is 800 dollars.
• Also, add a statement of purpose narrating your motive of forming your LLC. The main purpose of the LLC is to engage in any lawful activity for which a limited liability company might be organized under the California Revised Limited Liability Company Act.

Prepare Your LLC Operating Agreement

While preparing the Llc Operating Agreement also you might have to face many issues like the number of capital contributions, dealing with the penalties or remedies when capital contributions are not made, Besides you need to mention how profits and losses are spilled and distributed, indemnification protection for the managers and other related issues.

Many lawyers and even online filing services also have a standard form of LLC operation Agreement which needs to be modified and tailored to meet your individualized situation.

Besides you need to analyze the issues of raising money from investors, get an Employer Identification Number and licenses and permit. To meet all these legalities is not easy. So many people opt to create LLC online.  The online process can resolve many of the issues, and help businesses to start.

No doubt, a phenomenon of the business gang has been raging since corporations embraced America’s societal and economic reigns.  These are the constructive gangs which have shaped the economy of America and established themselves as complex entities that act according to its own set of motives and dynamics. And one of it is LLC.