Jack DonaldWhen corporations and business entities look to protect their personal assets from liability, they will often look to form an LLC, otherwise known as a Limited Liability Company. LLC formation policies differ in many states, so it becomes of vital importance to know and understand state regulations concerning this topic. The practical definition of an LLC is that it is an entity designed to tie together a corporation with its business partners in order to form protections against personal liability. Oftentimes, companies with a single owner are more suited for opening an LLC, as they can protect their personal assets from being accessed by a lawsuit against their company. In certain instances, courts will circumvent the use of an LLC, if it has been determined that a lawsuit against it is based on fraud or some type of misrepresentation.
In any state, filing an application with regard to registering an LLC, there are several key elements that must be included in the application. Each state bases its LLC laws on the Uniform Limited Liability Company Act, with different variations in each state. All states will require that within the naming convention, the phrase “LLC” appears in the name being applied for. It’s also important to check with the state to make sure of the availability of the selected name, or any other state that the corporation plans on doing business in. Most states have forms called “articles of organization,” that are required to be filled out. Each state will also require that when filling out the LLC formation application, a registered agent is designated to receive any official documents and acts as the company agent should any lawsuits be filed against the corporation. The registered agent must live in the state where the corporation originated from. Each state will also require that a member of the LLC be designated as the “Organizer.” In essence, that person acts on behalf of the LLC to certify that all information provided in the LLC opening application is accurate.
There are a wide variety of differences with each state’s LLC formation applications, and any corporation or business owner needs to be well-informed before embarking upon the application process. Any errors in the application can cause a delay of up to months in some cases. It is suggested to retain an attorney who specializes in corporation law and is familiar with state procedures to ensure the smooth LLC application process.
