People come up with ideas for new businesses all the time. Less often, people put their money where their mouth is and follow through on making it a reality. Establishing a limited liability company (LLC) is one way to take the helm of your business destiny. When you form an LLC, you’re taking responsibility for the profits and losses for your company while simultaneously protecting your personal assets. It can be an exciting—and sometimes nerve-wracking—venture, but it’s the first step on your journey toward being your own boss!
Once you have an idea, it’s time to take the necessary steps to establish your company and protect it with LLC business insurance policy. Here are the four main components you need to get your small business off to a solid start, no matter which industry you plan to enter.
Unique Name
As Shakespeare once wrote, “What’s in a name? That which we call a rose by any other name would smell as sweet.” Except when it comes to your business, the name does matter! Not only should you choose a creative name for your LLC that you won’t mind sticking with for the long haul, but you must follow several guidelines in selecting your moniker. According to Nolo, typically the name:
Articles of Organization
The articles of organization outline the bare bones of your fledgling business, and is legally required to legitimize your LLC. It will also help you express a clearer idea of the structure and aims of your brand new company. As the U.S. Small Business Administration writes , it is a “simple document” that “includes information like your business name, address, and the names of its members.”
It’s up to you to figure out where to file your articles of organization. In most states, you’ll head to the Secretary of State to submit it.
Operating Agreement
Unlike the articles of organization, the operating agreement isn’t necessarily mandatory. But it certainly is helpful. The operating agreement delves even deeper into your LLC to define the decision-making processes, financial distribution and how members can sever ties if they wish to do so down the line. If you’re going into business with partners, the operating agreement acts as a binding contract if everyone signs on the dotted line.
Business Licenses
Depending on the nature of your business, you’ll likely need business permits and licenses to operate on a local, state or national level. It’s always better to be safe than sorry. As The Balance
points out , you may not need a local business license if you’re already registered with the state, but you should inquire anyway. However, your LLC may require a trader’s license of a seller’s permit to get started.
Do you already have a winning name picked out for your LLC? Before you take the plunge and form your company, learn more about business insurance options for LLCs!
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