How Is a LLC Corporation Formed?


Quick Answer

Forming a limited liability company, also known as an LLC, involves selecting a business name for the new entity and filing appropriate paperwork with the LLC filing office of the state in which the business exists. Each state associates different fees and taxes with the filing process.

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Full Answer

The first step in forming an LLC is to select a name for the business that is not already in use by another entity and complies with any state naming regulations. For example, many states prohibit LLC's from using the words "bank," "corporation" or "insurance" in the name due to specific laws about different types of business entities or advertising and branding regulations. The LLC office of most states supplies tools for searching registered business names, and some also allow applicants to reserve a name for a nominal price during the application process

The other main aspect of creating an LLC is the creation and filing of its articles of organization, which is a document that outlines basic operating rules and guidelines for the business. Each state has different requirements for what must be included in these documents. These documents are part of an operating agreement that must be filed with the state LLC office.

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