A limited liability company, or LLC, is a business structure that can offer certain liability protection to its owners. In certain states, you don’t need a Business Lawyer Auckland to form an LLC. But even in those jurisdictions, it’s highly advisable to consult with an attorney about your options before deciding whether or not to form an LLC.
Here are some things you should know about choosing an attorney for your LLC formation:
SELECTION OF STATE FOR YOUR LIMITED LIABILITY COMPANY
Choosing the right state for your LLC is important. Your choice of jurisdiction will determine how much tax you pay and how many legal rights you have as an owner. You can choose from several states, each with its own advantages and disadvantages.
An Estate Lawyer Auckland can help you decide which state is best to register your LLC in by weighing certain factors, including these:
- The type of business being conducted (i.e., whether it’s interstate or local).
- The amount of money at stake if something goes wrong or someone sues over a dispute related to this business activity (i.e., whether it’s large enough to warrant more protection).
THE APPLICABILITY OF LIABILITY PROTECTION
In an LLC, the owners of the company are treated as “members.” They share profits and losses with each other. The members can be individuals or other business entities (such as corporations or partnerships). Members have limited liability for acts and debts of the LLC.
This means that a creditor cannot go after their personal assets to satisfy a judgment against your business. However, there are some exceptions to this rule that you should understand well before forming your own LLC:
DRAFTING AND NEGOTIATING AN OPERATING AGREEMENT
An operating agreement is a document that outlines the terms and conditions that govern the relationship between members of an LLC. An operating agreement can be signed at the time of formation, but it is not mandatory.
An operating agreement provides certainty regarding how disputes will be resolved, who has authority to make decisions and what happens if there is a disagreement among owners.
For example, if two owners disagree about whether or not to sell their business and one owner files for bankruptcy protection, an operational agreement would provide clarity on who has authority over day-to-day matters like paying employees or making payroll deposits.
Operating agreements are also useful when you need more than one person to sign off on important decisions such as extending credit facilities or approving real estate transactions; without an operational agreement in place, you may find yourself unable to secure these loans simply because no one knows who has ultimate say over these types of decisions (and how they should be made).
COMPLIANCE WITH ONGOING REQUIREMENTS FOR LLCS
To maintain your LLC, you must file annual reports with the state. You must also pay taxes on LLC income and file an informational return with the Internal Revenue Service (the IRS).
You’ll need to keep records of your business’s transactions and activities. You’ll also be required to maintain a registered agent in the state where your company is based and a tax identification number from the IRS.
All of these tasks require legal advice from an experienced Business Lawyer Auckland who is familiar with how to best execute them according to applicable laws and regulations for LLCs in their particular jurisdiction.
Conclusion
As you can see, forming an LLC is a complex process. There are many factors to consider, from selecting the right state for your business, to ensuring that your operating agreement meets all of your needs. Without the assistance of an attorney who is familiar with these issues, it could be very difficult to make the best choices.
In short, while forming an LLC may seem straight forward at first glance, there are many details that must be considered before moving forward with this decision.
