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Forming the Company
In most states, a limited liability company is formed by filing a simple form of articles of organization with the secretary of state. The articles must include such information as the name of the company, its organizers, and the address of the company's office. The articles may also contain provisions appointing individuals to manage the company, creating obligations for owners to contribute capital to the company, limiting the authority of owners to bind the company, and other information desired by the owners.
A few states require the members of a limited liability company to advertise the formation of their company in a local newspaper. For example, New York requires organizers of a limited liability company to publish a newspaper notice that includes the name of the company, the date of formation, and the county in which the company's office is located.
The members of a limited liability company usually enter into an operating agreement to govern the company's internal affairs. The operating agreement of a limited liability company is similar to the bylaws and shareholders' agreement of a corporation or to a partnership agreement. The agreement remains confidential since it is not filed with the secretary of state. Operating agreements typically cover capital contributions, allocation of profits and losses, distribution of earnings, management, transfer of investment, and dissolution of the company.
In most states, one or more persons can own limited liability companies. The owners of the company can be individuals, partnerships, trusts or corporations.
Your lawyer can help you plan how to satisfy these organizational and ownership requirements, prepare articles of organization and an operating agreement, and register the company in each state where it plans to conduct business.
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