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5 common steps to forming a limited liability company

Forming a limited liability company for your small business -- or any-sized business -- endeavor can offer a number of benefits. One of the biggest benefits of the LLC formation is that it buffers you personally from the business's liabilities, so your personal assets aren't always on the line. While every situation is unique, there are some common steps to forming an LLC.

First, you have to pick a name. But you can't just sit down with pen and paper and brainstorm until you find a name you think is perfect. You also have to make sure that the name you choose isn't being used by another business. This is usually done by searching the state business databases. In addition, your state might have rules about how LLC names must be structured, and your name will have to comply with those rules.

Once you have an appropriate, unique name, you file what are known as Articles of Organization. You'll also have to pay any filing fees your state or local court requires.

Next, you'll want to create an agreement that governs how the LLC will be run. This is a bit more formal than a business plan, and it governs all members of the LLC. This type of paperwork is especially important if more than one person is entering into the LLC together.

Some states require that you publish some type of notice regarding the launch of your LLC. Finally, you'll need to obtain the local, state and federal permits that are required for your individual business. Working with a business law attorney can help you understand the details behind all of these steps so you don't miss any important forms or requirements.

Source: FindLaw, "Forming an LLC," accessed June 22, 2016

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