LLC Formation - Forming an LLC is very similar to incorporating, however the filed documents are called Articles of Organization and the company owners are called LLC members. This is conducted by filing the correct documents with appropriate government agency. Once your LLC is filed you must adopt an operating agreement, that is used to govern your company. The operating agreement is a legal document where the management type, ownership and interest, allocation of power and other forms of operating the company are described in legal detail. The operating agreement is not generally filed or recorded with any state or federal office.
When you form your LLC there are a couple of key items that need to be identified: The management method and the initial members. Most states accept single member LLC's. Some LLCs are managed by its members. Or you may elect to assign managers to the LLC, similar to that of corporate officers. When managers run the company, their power and control is detailed in the operating agreement as well as voting rights and distribution of interest, just to name a few. The management structure can be arranged so that the manager has total control and little to no ownership. This may be an ideal arrangement to maximize asset protection. Companies Incorporated delivers a comprehensive LLC operating agreement with each formation package.
An LLC that operates as a partnership is required to obtain a Federal Employer ID Number. A single-member LLC will also need to obtain an EIN if it hires employees or meets other IRS guidelines. In addition, banks usually require businesses to obtain an Employer ID Number prior to opening a business bank account.