The limited liability company, more commonly known as LLC, is a relatively new business structure that has attracted the attention of many. Its features many advantages especially for industry start-ups. Here are some of the most frequently asked questions about LLC formation:
Where should I form an LLC?
People often choose to form LLCs in their home state, as this helps them save money. There’s no need to register as a “foreign LLC” or pay another individual to act as the registered agent. If you want to form an LLC in Wisconsin, for example, you need at least one member and provide a document with a list of the members and managers’ names and addresses, if any.
How do I choose an LLC name?
The rules differ from state to state, but generally, the business name must end with “LLC,” “Limited Liability Company,” “L.L.C.” or “Ltd. Liability Co.” You can use your own name as part of the company name. Keep in mind, however, that it may not be accepted if it’s deemed misleading or similar to an already existing LLC. That’s why you have to do a little research to find out if your chosen name is taken.
How do I manage an LLC?
There are two ways to manage an LLC: either by the members or by one or more managers. A “member” is an owner of the LLC, while a “manager” is someone selected by the members to do the job. If the members manage the LLC, then they’re directly responsible for running it. A manager, on the other hand, works the same way as a director of a corporation. If an LLC is run by managers, and the members aren’t directly in-charge of its operations.
How are LLC officers appointed?
Whether owners or managers run an LLC, it can still appoint officers to be responsible for its daily operations. In LLCs, however, having officers is not a requirement. Officers are selected either by the managers or the members, or they themselves can also assume the role. There’s no limit on how many officers an LLC can have.
Is it a requirement for an LLC to have a registered agent?
Yes. An LLC should have a registered agent. This is the person tasked to accept any official notice in case an LLC is “served” with a lawsuit. A registered agent can be an adult living in the state of formation and holds a street address (P.O. boxes aren’t acceptable) or a company registered with the Secretary of state where the LLC is formed.
LLCs are often described as a hybrid entity, maximizing the advantages of other business structures and minimizing the difficulties. If you think this is the right structure for you, research online for additional information on how to successfully form an LLC in Wisconsin.