Forming a Limited Liability Company (LLC) is an exciting moment for any small business. It is one of the first steps towards creating a truly independent entity that can operate separately from its owners, but also be protected from their personal assets in case of a lawsuit.
However, forming an LLC is not always as simple as it seems. There are many things to consider before establishing your own business structure, and while some of these considerations can be made before you even decide on what type of business you want to start, others will come up during your LLC formation process.
The following tips will help you avoid common pitfalls when forming your own LLC in the new year.
Create a business name and file it with your local government.
The first step of starting a LLC business is to create a name for your company. You can use any business name you like as long as it isn't already in use by another company or trademarked. To ensure that no one else has already taken this name, you'll want to run a search with the state government where you live before filing for incorporation. Once you've found an available name, contact your local government and file for the appropriate paperwork needed to establish your LLC.
Find a location to rent or purchase.
The next step in starting a LLC business is to find a location where you can rent or purchase office space. If you're opening a retail store or another type of shop, you'll need to find an appropriate location and sign a lease with the landlord. If running your business online is more convenient for you, BloomWell offers virtual office space at reasonable prices.
Create an operating agreement, which will outline how the LLC will be run.
The LLC operating agreement is a document that outlines how the business will be run, what happens in case of a dispute between partners, and much more. An operating agreement can also help prevent future problems if one of your partners decides to sell their share of the company at some point. The agreement should also contain information about how profits are distributed among members of the LLC. This process can take time, but BloomWell is here to help you create your operating agreement quickly and accurately. Next, purchase insurance for your business, which will protect it against lawsuits and property damage claims. You'll need to purchase liability insurance as soon as possible after establishing your LLC; this type of coverage protects you from lawsuits resulting from injuries sustained by customers who visit your shop or office space.
We specialize in helping new businesses set up their systems from the ground up so they're ready to go when they launch. We can also help make sure your financials are in order so that when tax season rolls around, you don't have any surprises waiting for you.