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LLC Requirements

March 5, 2024

LLC Requirements

March 5, 2024

Table of Contents

Limited liability companies exist as a business structure in the United States. An LLC offers limited liability protection to its owner or owners (known as members). LLCs, ensure that the members are not personally liable for the company's debts or liabilities. When forming an LLC, you are provided benefits from that of a partnership or sole proprietorship as well as a corporation.

How an LLC is More Flexible than a Corporation

An LLC is afforded various benefits as compared to corporations. For instance, an LL can be a single-owner business, a partnership, or a multi-member structure. Rather than corporations which cannot be a single member, and in some cases no more than 100 members. There are no limits to the number of members in an LLC.

LLCs are also afforded the opportunity to elect taxation. This means that rather than automatically being taxed as a sole proprietor or partnership, you can also elect corporate taxation. This can provide a whole host of advantages and flexibility.

Flexibility in management structure is also something that is afforded for an LLC. Corporations are required to hold meetings and keep thorough records. LLCs are able to manage their businesses however they like, according to their own operating agreement.

What is Required of an LLC

Business Name

The first step to forming an LLC is to select a name. There are three main requirements regardless of the state you form in, these include:

  • Must be unique
  • Have the phrase “Limited Liability Company,” or another variation in it (such as LLC)
  • Not include forbidden or restricted terms unless authorized to do so

Registered Agent

It is legally required for any LLC to have a registered agent. Registered agents may be a member of the LLC, or an employee, manager, or even a third party. The registered agent is required to have a legal address in the state that the LLC is formed in, in order to receive due process and legal mail on behalf of the company.

Operating Agreement

States do not require LLCs to file an operating agreement. But an operating agreement may prove to be the most important governance document an LLC can have. This is why every LLC should have one. The operating agreement dictates the functions of the managers/members, as well as how meetings can be called, and any formalities in member voting. It also includes tax and financial provisions, and any limits on issuing and transferring capital interests. Essentially it gives structure on how the LLC is managed.

Articles of Organization

Every LLC requires a Certificate of Organization. It is also known as the Articles of Organization in some states. This is your LLCs proof of existence within the state of formation. It is issued by the state and requires all potential LLCs to file with the state, along with paying the necessary state fees.

The Articles of Organization includes the following:

  • LLC's name
  • LLC's purpose
  • Principal and mailing address of the LLC
  • Duration of the LLC
  • Name and address of your LLC's registered agent
  • The management structure

Business Licenses and Permits

Depending on where your business is located, and the business you perform, you may need permits or licenses to operate. This will need to be acquired in order to meet all federal, state, and local laws, and to remain in good standing.

File Annual Reports and Fees

Some states will require annual paperwork that documents your business, as well as filing fees. Although this will depend on where you are formed, California charges up to $800 annually as an LLC tax. Other states have much lower fees, and some have none, but it is essential to know this before going into business.

Who is an LLC Best for?

The main difference between an LLC and a corporation is that LLCs are owned by one or more people known as members, while corporations are owned by their shareholders. No matter which entity you choose, both offer various benefits.

Forming a limited liability company (LLC) is an easy and inexpensive way to structure your sole proprietorship or small business. It provides limited liability protection and can keep your assets safe. Forming an LLC is good for those who want to benefit from pass-through taxation, and avoid double taxation that occurs with a corporation.

You might want to consider a corporation if you are looking for more flexibility when it comes to excess profits. Because all income in an LLC flows through to the members, S corporations are allowed to pass income and losses to their shareholders. This would then report taxes on an individual tax return at ordinary levels. Corporations do require a lot of documentation though, and specifics when it comes to management.

Work with a Lawyer to Create Your LLC

Although it is possible to form an LLC on your own, hiring a business lawyer can reduce the exposure of your business to lawsuits. In many cases forming an LLC is a lengthy process filled with a lot of paperwork. Using a business lawyer will help get your business in legal order for state and federal laws. This can cause you a headache down the road and ensure that you form fully in compliance.

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Author
Andrew Pierce
,

Andrew Pierce: Visionary Founder & CEO

Nationwide Business Formation Simplified

Under Andrew Pierce’s leadership, LLC Attorney has become the flagship brand of the Company Sage family, helping entrepreneurs across all 50 states form their businesses quickly, affordably, and confidently.

The story began with Wyoming LLC Attorney—our sister company specializing in Wyoming formations—which Andrew founded after a frustrating personal experience: filing the wrong type of entity for his own early business venture. Realizing that small business owners didn’t just need paperwork filed—they needed clear, expert guidance—Andrew launched Wyoming LLC Attorney to fill that gap.

Building on that success, Andrew saw a greater opportunity: entrepreneurs nationwide needed the same level of education, compliance focus, and affordable service, no matter their state. This insight led to the creation of LLC Attorney, expanding his proven approach from a single-state solution to a true national platform.

A Mission to Make Expert Business Guidance and Ongoing Support Accessible to All

Today, as CEO of LLC Attorney and Company Sage, Andrew remains committed to his founding mission:

"Entrepreneurs shouldn’t have to choose between getting expert guidance and affordable pricing."

Unlike traditional law firms, LLC Attorney was deliberately built as a specialized service backed by legal expertise—eliminating the barriers of retainers and hourly fees while ensuring entrepreneurs get the trusted advice they need.

But business formation is just the beginning. Through the Company Sage Business Success Platform™, clients also gain access to a technology-enabled hub that helps them stay organized, track important compliance deadlines, and access tools designed to help them run and grow their businesses with confidence.

Under Andrew's leadership, Company Sage has helped over 100,000 businesses launch and thrive. What started with one personal mistake has evolved into a nationwide support system, putting legal compliance and small business success at the center of everything we do.

Thought Leadership & Industry Recognition

Drawing from his extensive experience across multiple industries and business structures, Andrew regularly shares his expertise through in-depth articles on the LLC Attorney blog and the Wyoming LLC Attorney website. His contributions cover essential topics for entrepreneurs at every stage—from initial formation decisions and entity selection guides to advanced strategies for scaling businesses through holding company structures. Andrew's comparative analyses of business formation across different states have become particularly valuable resources for entrepreneurs seeking to maximize advantages for their specific situations.

As a recognized expert in the field, Andrew has been featured on numerous entrepreneurship podcasts, industry webinars, and business formation panels, where he discusses the nuances of entity selection and structural optimization. His insights on business formation trends and regulatory changes have been cited in business news articles and industry publications, further cementing his reputation as a thought leader in the space.

His practical, jargon-free advice on when an LLC is necessary, operational best practices, and tax optimization strategies has positioned him as a trusted authority in the business formation industry. By translating complex legal concepts into actionable insights for business owners, Andrew continues to fulfill LLC Attorney's mission of making business formation accessible to everyone.

Linkedin
https://www.linkedin.com/in/andrewspierce/

Podcasts and Webinars:
https://debutify.com/podcast/andrew-and-mark-pierce-protect-your-business-and-your-finances-with-llc-and-peerless-expertise

https://www.therealestatecpa.com/podcasts/74-entity-structuring-and-asset-protection-with-wyoming-llcs/

https://www.thefearlessadvocate.com/article/keeping-business-affairs-private/

News:

CNN: https://www.cnn.com/2024/10/17/politics/trump-watches-wyoming-invs/index.html

New York Magazine: https://nymag.com/intelligencer/article/are-trumps-swiss-made-watches-from-wyoming.html

Washington Post: https://www.washingtonpost.com/elections/2024/09/27/trump-watches-100000