The choices you make today affect your business’s future
On behalf of Kadish & Associates Law Group posted in blog on Thursday, April 27, 2017.
When starting a business, the choices that you make have tremendous impact on its future. The first major choice you will need to make concerns the type of entity that you will form. Like others who form small businesses, a limited liability company remains a popular choice.
It takes more than just filing your Articles of Organization to make an LLC work for your business in the best way possible. As you go through the following steps to form your new company, make your choices carefully and ask for guidance and assistance where needed. Consulting with an attorney could also help prevent you from making a mistake or missing a step that could end up costing you and your company in the future.
Forming an LLC follows certain general guidelines no matter where you live.
Choose a name
Many people think this is the hardest part of forming an LLC. You expect that whatever name you choose will follow the business forever, so you might agonize over your choice. Before that name becomes yours, however, you must complete the following tasks:
- The name cannot be substantially similar or the same as another already registered here in Arizona.
- The name must include some form of LLC after it such as “LLC,” “L.L.C.” or “limited liability company.”
- The name cannot include any words restricted by the state. For instance, many states will not allow the use of the words “bank” or “insurance” for a company not in those industries and following the rules regarding them.
Fortunately, you don’t have to reserve the name you choose once it complies with these three requirements, unless a substantial amount of time could pass before you file your articles of organization. Otherwise, you register the name when you file the articles.
Articles of organization
The Arizona Corporation Commission is where you file your articles, and you must include the name of your business, its principal address and the names of its members. Other information may be included as well, such as the purpose and duration of the business. This only represents basic “must have” information.
The state might not require you to create an operating agreement, but you should. This document gives you the opportunity to determine and document how the business will operate on a daily basis, deal with its financial obligations and how the business will be organized. In addition, your operating agreement can contain a five-year plan to help your business grow and succeed.
Since this document doesn’t get filed with any governmental agency, you have the freedom to adjust it as your business changes. What you think might work today might not work in practice. However, it gives you a starting point and goals. Many people might tell you that an operating agreement is only necessary when the company has more than one member, but it could be useful even if you serve as the LLC’s only member.
Business formation attorneys routinely help businesses with these tasks and could provide you with invaluable insights into what you could include in your operating agreement, what name to choose and how to file your articles of organization.