Think of forming a Limited Liability Company (LLC) as building the foundation of a long-lasting structure. Before you pick up those construction tools, you’ll need to procure all the documents. Yes, paperwork is essential for your property to be considered a legal building rather than a rogue shack on wheels. In this piece, we will go over six documents needed to form an LLC, each with its respective function in the process.
6 Documents You Need to Form an LLC
Starting the process of an LLC can be an exhilarating journey, yet it requires some necessary documentation. These documents are:
- Internal Revenue Service (IRS) Form SS-4
- Name Reservation Application
- Articles of Organization
- Operating Agreement
- Initial and Annual Reports
- Tax Registrations
Internal Revenue Service (IRS) Form SS-4
First, we have IRS Form SS-4. This form is required to apply for an Employer Identification Number (EIN) for your LLC. Think of your LLC’s EIN as your Social Security number for your LLC. It identifies your LLC for tax purposes. It is also a requirement for hiring employees and opening a business bank account. Filling out the SS-4 is easy. You will need to provide basic information regarding your LLC, such as the name, address, and type of LLC. After that, online and by mail submission will allow for an on-time issuance of your EIN.
Name Reservation Application
The Name Reservation Application must be filed before registering the LLC. This reserves your preferred business name, so other entities aren’t able to take it. Before formally registering your LLC, confirm that your business name isn’t already in use.
The Name Reservation Application also allows you to file using your LLC name to your state’s business registration office. This step is imperative to secure your LLC name from any other company claiming a name as their business. Procedures vary from state to state, but they are typically a simple document at a nominal price.
Articles of Organization
The Articles of Organization (or Certificate of Organization or Certificate of Formation) is the most important document you file when creating your LLC. This document formally registers your business with the state and allows you to operate as a legal entity.
Typically, you’ll need to include information such as:
- LLC Name: The business name must be different from another corporate entity in your state.
- Principal Address: This is your LLC’s main office and the physical address where documents are mailed.
- Registered Agent: A person or business appointed to receive important documents on behalf of your LLC.
- Management Structure: This defines whether your LLC will be managed by its members or managers.
- Purpose of the LLC: A short description of what your LLC will be doing & its purpose.
- Duration: This is how long your LLC plans to exist. This can either be indefinitely or for a fixed period.
- Organizer Information: The organizer is the person taking care of filing the Articles of Organization and putting the LLC together.
Operating Agreement
An operating agreement is an important document describing the ownership and operating procedure of an LLC. Not every state mandates this document, but it is definitely a good idea to have one anyway. This document is how your LLC is going to be run. Whether by the members themselves or by managers that they appoint. It also indicated each member’s ownership percentage and how profits/losses would be allocated. It will also state how many votes each member receives on company matters and the logistics of meetings (how meetings will be conducted and recorded, etc.).
Initial and Annual Reports
After establishing your LLC, you must keep it compliant and in good standing by filing Initial and Annual Reports.
The Initial Report is often due only a couple of months after putting your LLC together. It informs the state of the current status of your LLC and any details that have been changed since it was originally formed.
Annual Reports are much the same but are due every year to keep your LLC compliant and in good standing. It usually informs the state of the current status of your LLC and confirms it is still in operation.
Tax Registrations
There are often state and local taxes that need to be registered based on your business type and location — things like sales tax, unemployment insurance tax, etc.
Registering for these taxes is important to ensure compliance with state and local governments to avoid fines or other legal problems.
Form Your LLC with Workhy
Creating an LLC takes a fair amount of documents, each with its importance, to successfully put it together and maintain it. From obtaining an EIN using the IRS Form SS-4 to adhering to your Initial and Annual Reports, each document lays down its stepping stone toward your LLC’s success.
By taking the time to understand and prepare each document, you’ll be setting up your new business endeavor nicely. Ready to begin? Get started with Workhy and obtain your LLC the right way!
