Depending on the type of business structure chosen by an entrepreneur, these concepts manifest themselves in different ways. Ownership and control of businesses usually begins with some sort of agreement between the owners or founders and management. Two of the most attractive things about an LLC are that it prevents business owners from being personally responsible for things related to the business, and it offers pass-through tax status. It also has fewer formalities and requires less legal paperwork. Each type of business entity will inherently have a different relationship in terms of management, operations, and ownership. Depending on the type of entity you choose for your business, your answers to the above questions will vary. When we look at how these documents affect the operations of different types of businesses, it`s important to think for a moment about the ideas of ownership and control. Names checked for availability must be distinguishable from company names, limited liability companies and trade names already registered or reserved in the Office of the Secretary of State. In addition to checking names by different spellings (Cajun vs Kajun), names are phonetically checked (excellent vs.
x e slow). (The names of partnerships are not contradictory and will not be taken into account when verifying the availability of names for the entities listed above. Trademarks and service marks only conflict with other trademarks and service marks registered in the same class.) No corporate name or limited liability company may contain the phrase “doing business as” or the abbreviation “d/b/a”. The names of the revoked Louisiana and limited liability companies will not be available for a period of three years from the date of withdrawal. Almost all states require your company to have a registered agent, also known as a legal representative, service or process agent, or resident agent. This is a person or company that accepts legal and tax documents on behalf of the company. All agents must have a physical address in the state and be available during business hours. In some states, limited liability companies (LLCs) are required to enter into an operating agreement. A company agreement defines the fundamental ideals of the company and the expectations of its members.
In particular, operating agreements define the following: A type of business entity owned and managed by a person – there is no legal distinction between owner and business. Sole proprietorships are the most common form of legal structure for small businesses. The Secretary of State offers his clients the convenience of walk-in service. Documents can be processed while the client expects a $50 priority fee or within 24 hours for a $30 acceleration fee. All expedited fees are in addition to the required filing fee. Forms provided by the Secretary of State and publications compiled by the Secretary of State are available. Documents can be delivered for non-expedited processing. The customer can leave a mailing address or phone number for notification when the processing is completed. Don`t exceed your authority. A power of attorney document may give you broad powers to conduct business, or your powers may be more limited.
Make sure you understand what you can and cannot do as a lawyer, and consult a lawyer if you need clarification. You may face civil or criminal penalties for unauthorized transactions. There are various organizational documents you need to form a business. Since starting this type of business is complicated, you should consult with legal and tax professionals to make sure you follow all the guidelines and submit all the required documents. Incorporation: Corporations are more complex entities to create, have more legal and accounting requirements, and are more complex to operate than sole proprietorships, partnerships, or LLCs. One of the main disadvantages of a company is the high level of governance and oversight by the board of directors. Often, this prolongs decision-making when multiple shareholders or investors are involved. If you are signing as a power of attorney for someone, you should note that you are legally signing on their behalf.
All companies, regardless of their structure, require an EIN (Employee Identification Number). Instead of your Social Security number, you should use your EIN for all of your business records. You`ll also need your EIN to open a business bank account. To obtain an EIN, you or your lawyer must complete the IRS Form SS-4. In addition to filing the certificate of authority and state fees, you may also need to obtain additional documents to prove that your business is in good condition in its home state, meaning your business is up to date on taxes and other documents for which you are responsible. Some states require that this declaration be obtained within a certain period of time following the application for a certificate of authority, such as 30 or 60 days. Founders are the persons responsible for filing a company`s incorporation documents. Provide their names and addresses. The founders must also sign the articles of association. If you are considering filing as an LLC, you need to make sure that all your LLC legal documents are completed and prepared in the right way. The three essential incorporation documents of LLC are: Taxation: An LLC is considered a “flow-through entity” for tax purposes.
This means that business income through the corporation goes to LLC members who report their share of profits or losses on their individual tax returns. The LLC entity is only required to file an informative tax return that resembles the character of the partnership. Single-member LLCs are authorized to report business expenses on Form 1040 Schedule C, E or F. LLCs with more than one member typically file a 1065 Declaration of Partnership form. A will and last will and power of attorney are powerful and important documents that give you security and protect your family. Describe the number of authorized shares your company will issue. Regardless of the size of the company, everyone has shares because it represents the ownership of the company. If a corporation plans to approve both preferred shares and common shares, this information must be included in the articles with voting rights.
Benefits of the LLC structure: • The owners have limited liability, which means that the company is responsible for all liabilities incurred. • The profits and losses of the company are passed on to the member and taxed only at the individual level. • Allows unlimited membership A shareholders` agreement is a document prepared between shareholders to define the details of their ownership and rights. These documents are not necessarily filed publicly and the content may vary from company to company. In general, shareholder agreements concern the following aspects: If you intend to do business outside the state where your company is registered, you may need a certificate of authority to do so legally. The requirements and process for obtaining the certificate vary by province or territory. Most states also require articles of association to state the purpose of the corporation, although the corporation may define its purpose very broadly in order to maintain flexibility in its operations. Amazon`s certificate of incorporation, for example, states that the company`s purpose is to “engage in any lawful act or activity for which businesses may be arranged under the Delaware General Corporate Acts.” A sole proprietorship is the most basic business operation. Since a sole proprietorship has only one owner, issues of control or ownership are contentious. In most states, there is no legal requirement to file any type of document to start a sole proprietorship. A possible exception is the assumed name certificate. This certificate corresponds to the assumed name or company name with the name of the business owner.
Thus, it solidifies the link between the two names and emphasizes the fact that sole proprietors are personally responsible for any debt or litigation imposed on their business. The availability of companies, limited liability companies, trade names, trademarks and service marks should be verified.