Forming A New LLC

For the past few weeks I have been debating how I should structure my new company (LLC, S Corp, or C Corp). I quickly narrowed my choices down to LLC and S Corp, eventually settling on LLC, for simplicity of formation, pass through taxation and the less formal business structure of a LLC. Here are a few steps to getting your company set up as a limited liability company.

1) Name Your Company
Assuming you already know what you want your company to do, you need a name that is not already registered.

2) Get the Right Paperwork.
You dont need use an expensive service to file your paperwork. You simply need to navigate to your state government’s web page and get the correct paperwork, Articles of Organization. In Michigan you need to get your hands on Form 700 Articles of Organization from the Michigan Department of Labor and Economic Growth

3) File your paperwork
Now that you have your forms it is time to fill them out, put them in an envelope with a check to cover the processing fees ($50 in MI) and Mail them to the address on the form. It will take about 5 business days to get your paperwork back unless you have them expedited.

4) File for a Tax ID Number

5) Create an Operating Agreement
Much like corporate bylaws, an operating agreement lays out the rules of how the company is to be run and how ownership interest is to be divided amongst members of the LLC. LLCs do not have shares of stock like corporations.

6) Business Plan
Create a business plan and keep it up to date. This living document will help you stay focused on the goals and vision of your company. Include business cases, cash flow models, competitive data, marketing plans, growth and sales forecasts. Create your own plan that helps you sort out your ideas of what your company is and what it can be.

After that, work your face off. Work on developing ideas, developing new business and creating relationships with your employees, customers and vendors that will let your company grow for years to come.