how to be an llc

Getting Started

If you’re ready to how to be an llc  your own business, the first step is to form an LLC. This is a legal entity that separates your personal assets from the company’s debt and claims, allowing you to be protected from liability if your business goes bankrupt or gets sued.

Be sure to file articles of organization in your state, and make a list of all the members and managers that will be involved with the LLC’s management and operations. You should also have an operating agreement in place.

The Articles of Organization, often called the Certificate of Formation or Articles of Incorporation, are your business’s official documents. They contain your LLC’s name, purpose, and legal address. They also include important details, such as the capital that was contributed by LLC members and the ownership percentages of each member.

How to Choose the Right Structure for Your LLC

Organizer signatures, authorized members or managers (depending on the state parameters), and the unique identifying name of the LLC are also required in these documents. Typically, one organizer of the LLC signs and files the Articles of Organization; however, states routinely require at least all initial members of the LLC to sign and date the articles as an indication of their participation in the business.

The articles of organization also detail how you’ll organize and manage your LLC, including the capital contribution of each member and how your profits and losses will be distributed among the members. They describe how you’ll vote on LLC business decisions and how you’ll handle membership changes, such as buying out or selling a member’s interest in the LLC. They also provide information about how to dissolve your LLC if you need to do so, including how to divide any remaining assets or profits among the members.

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