DIY Limited Liability Company
Structure and Operating Agreement
- You first need to decide what structure your LLC will take. Will it be member-manager, meaning one of the members, or owners, serves as the manager, or will you hire an independent manager who is just an employee and not also a member? After deciding on the structure, you need to draft a formal Operating Agreement that defines membership interests, profit-sharing and distribution, member meeting procedures and rules, and any other significant stipulations for the operation of the LLC. An Operating Agreement does not have to be filed, but it should be
Articles of Organization
- The other major legal document you need to draft is called the LLC Articles of Organization. This document outlines the basic structure and legal status of the LLC. It also lists a registered agent, the names and addresses of the organizers, the names and addresses of the members, and the principal location of the business. Many states have specific requirements on what must be included in these articles, so you need to check your state law on this. You can call the state's department of commerce or business affairs to learn more about these requirements.
- You need to register a business name with your state's commerce or business department. You will have to verify that the name is not already registered under another business.
After registering your name, you will need to register a copy of your Articles of Organization. Also, you will need to pay a filing fee to your state. The filing fee varies from state to state, but generally ranges from $100 to $800.
If you will have any employees, then you will also need to register with the IRS to obtain a federal tax identification number. You also may need to obtain a state tax identification number, but this requirement varies from one state to another.