Do-It-Yourself LLC Formation: Easy and Fast
You've decided you need an LLC for your real estate investing or
small business. But the attorney wants several hundred dollars
or more to fill out the paperwork. Isn't there a cheaper way to
set up an LLC? You bet. You can do it yourself.
An LLC formation, by design, is very straight forward. To set up
an LLC, you file articles of LLC formation or articles of
organization with the state government agency in charge of
corporations and limited liability companies. This document is
sometimes a simple, one-page form. Typically, the document can
also be a type-written list of descriptive bits about new LLC
(the name of the LLC, the person performing the LLC formation,
and so on).
Different states have different names for the offices or
agencies that process the LLC formation articles, but the agency
or office is usually fairly easy to locate through a web search.
Typically, the agency or office is connected with the state's
secretary of state office and is named something like
"Corporation Division" or "Corporations Division." Note that
some states (including Washington state where I live) let you
file your articles of formation or articles of organization
online.
States may also have additional setup requirements beyond simply
filing the LLC formation articles. Some states such Arizona
require that public notice be given in a newspaper. Some states
such as New York require an operating agreement. Which raises an
important point: It's really an excellent idea to have an
operating agreement written up to describe how the LLCs owners,
or members, relate to each other and to the LLC. Attorneys even
recommend that single-member LLCs should have an operating
agreement because the operating agreement, if honored, improves
the liability protection.
After the state accepts your articles of LLC formation and you
complete any other state requirements, you're done with your LLC
formation.
About the author:
Redmond-Kirkland WA CPA
Stephen L. Nelson is the author of both Quicken for Dummies
and QuickBooks for Dummies and an adjunct tax professor for
Golden Gate University's graduate tax school.
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