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Requirements for an LLC | ||
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Don't be misled by inexpensive entities or people who say they will create an entity for you for a ridiculously low price. All they are doing is registering your company with the State. You can do that yourself and save the formation fees. Think of the Entity as insurance. If you are never sued, audited, or your entity is never challenged, you have no need of it. All the entity does for you, if properly and completely formed, is protect you from personal liability. The assets of the entity itself cannot be protected from law suit. Why do we carry insurance? We carry it because of the possibility of being in an accident that could wipe out our financial stability. An entity, whether Limited Liability Company or Corporation, does the same thing. If the entity is sued, your personal assets (home, car, savings, investments, property, etc.) cannot be included in the suit PROVIDED you have kept your entity in compliance and up-to-date records with a completely self-explanatory and easy to follow paper trail. When the insurance doesn't cover you. Just like an insurance policy that is not kept up to date with payments, an entity can fail to protect you when it is needed the most. And there is nothing difficult or complex about it. You pay your insurance premiums regularly and you are covered; you keep your records up-to-date and property maintained, and you are covered. The need for the right coverage. An insurance policy that does not provide the type of protection needed when something happens, is no better than an entity that does not have the original proper papers, documents, or records on hand. It is of little value to buy a cheap insurance policy that does not cover you as it is to buy an entity at a very low price that does not provide the liability coverage needed. What is required for an LLC? Three main categories of documents are required. First, the Articles of Organization, with everything included that is needed for the full use of the entity; second is an Operating Agreement, with everything included that allows you to run your business the way you want (without such an Agreement the State can tell you how to run your business); and third, all the papers and documents needed and signed and placed in the Minutes and Record Book. What is required for a Corporation? See the Corporate Requirements. In addition, you need to keep Minutes. While some will say that you do not need to keep minutes of important actions in an LLC, and in some cases, State LLC Acts do not specifically require them, it is essential for minutes and resolutions to be kept for all LLCs. Minutes record the actions to be taken and the Resolutions of approval for that action, which adds immensely to the all-important paper trail that hinders attackers from winning their claim. While not every single issue needs to be kept, the important decisions and actions should always be listed. This is what provides, in part, the paper trail so important to fend off any attack on the entity, whether by audit or litigation. And don't be misled by claims that keeping these records are difficult or time-consuming. The forms we provide are simple to use and require minimal time to keep up-dated. You get what you pay for. In purchasing an entity, whether a Limited Liability Company, or a Corporation, there are no bargains. While you can buy a $100 suit off a department store rack that does not compare with a $3,000 tailor-made suit of Chinese Silk, both can be worn. A Chevy and a Lamborghini both can provide transportation, even though differently. But in buying an entity, you get what you pay for and no more--if the LLC or Corporation is challenged, and your records perused by a judge, or if a serious audit looks over your records, what you don't have, and didn't know, can cost you a bundle of money, your entity status and its protections, and even tax fines and penalties. Make sure when purchasing a Limited Liability Company, that everything you need is included. Compare the Articles of Organization content with our list, and the Operating Agreement with our list, and the company documents and papers with our list, and make sure they are complete in every way and not just blank spaces for you to write in your information. | ||||
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DISCLAIMER: The information provided on this site is for informational purposes only and is NOT to be relied upon as legal advice. This service is not a substitute for the advice of an attorney and we encourage users to have all documents created on our site reviewed by an attorney. No attorney-client relationship is established by use of our online forms or within our purchasable CDs, and the user is not to rely upon any information found anywhere on our site. THESE FORMS, CDs, AND ENTITIES ARE SOLD ON AN "AS IS" BASIS WITH NO WARRANTIES OR GUARANTIES. If you wish personal assistance in deciding whether the document or entity found on our site is right for you or desire representations and warranties upon the legality of the document you are purchasing in the jurisdiction you will be using it, contact an attorney licensed to practice law in your state | ||||||||||
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