Entrepreneurs in California need to establish a business entity, often a limited liability company, to separate business operations from their personal finances. To aid people confronted by this process, one web designer built the website LLC University. The online resource guides people through the process of forming an LLC, and the founder has explained the general steps for company formation.
Every LLC needs to have a unique name, he said. Forming a new business starts with conducting a name search in the state’s database. After confirming that the new business name is not already in use, people can complete the remaining paperwork. Every LLC will designate a registered agent. This person or organization is the official contact for the LLC.
Preparation of a document known generally as the articles of organization represents the next step. The state collects a fee when receiving this document that forms the official public record of the company. The members of the LLC should also execute an operating agreement that describes the company’s ownership. The LLC formation process also includes obtaining an employer identification number from the Internal Revenue Service. Once a new company has articles of organization and an EIN, it can open a business bank account.
A person creating a company could consult an attorney during this process. A legal representative familiar with business formation could assist with the name search and the writing of the articles of organization and operating agreement. An attorney could provide specific insights about other regulatory compliance that will be necessary for the new venture.
Source: CNBC, “How to form an LLC the right way, according to a man who makes a living blogging about it“, Zack Guzman, April 20, 2018