If you are looking to start a business in or around Los Angeles and want to establish a limited liability company (LLC), there are important issues and potential pitfalls you need to become aware of before making the proverbial leap and forming an LLC.
What is a Limited Liability Company?
An LLC is a type of business entity designed to shield business owners from personal liability from the ownership and operation of the business. When you create an LLC, the entity is the owner of the assets and responsible for the liabilities of your business. This means the business owner will not be personally liable for any debts incurred by the business. As a result, if an LLC business files for bankruptcy, the business owners would not be liable for the debts of the business. Instead, the owners only be responsible for whatever amount of money invested in the company.
Steps to Form an LLC
Establishing an LLC in California is a multi-step process. It is somewhat more complicated when compared to creating a sole proprietorship or general partnership. Hence, it makes sense to retain the services of an experienced and reputable business attorney in Los Angeles to help guide you through the process.
The first step you need to take in order to form an LLC in California is selecting the name for your LLC. This is important because California has an array of naming regulations that need to be followed when selecting an LLC business name. Your Los Angeles business lawyer can conduct a search to ensure that the name chosen has not been taken by another business.
The second step in setting up an LLC in California is to select a registered agent for your LLC. The registered agent is an official you designate and empower to transact business on behalf of your company.
The third step in establishing an LLC is to draft and file Articles of Organization with the California Secretary of State. The Articles of Organization need to include the following information:
- Name and address of your business;
- Name and contact information for the registered agent for your business; and
- Whether your company will be managed by one manager, more than one manager, or all of its members.
In addition to the Articles of Organization, you need to file an Initial Statement of Information within 90 days of forming the LLC with the California Secretary of State. The Statement of Information will require you to provide the following additional information:
- Full names of the company’s managers; and
- Purpose of your LLC.
The final step in establishing an LLC in California is to create an operating agreement. This document is extremely important to the success of your business because it details the ownership and operating procedures of your business, along with specific information concerning who is empowered to make decisions on what business decisions, how disputes are resolved, how assets and liabilities are divided, any contribution requirements, and how an owner or member can depart the business.
Need Help Establishing an LLC? Speak to an Experienced Business Attorney in Los Angeles
If you are interested in creating an LLC in Los Angeles, it is in your best interest to retain the counsel of an experienced business attorney in Los Angeles such as the reputable Hakim Law Group. Our Los Angeles business law firm represents an array of entrepreneurs, operating companies, venture capital firms, and financiers in the education, fashion, finance, health care, internet and social media, technology, real estate, and television industries. Whatever business issue you need addressed, including corporate formation, Hakim Law Group is here to help. For further information or to schedule an appointment please contact HLG at 310.993.2203 or visit www.HakimLawGroup.com to learn more.