Learn all about LLC Statute and the different LLC laws by state. This complete guide will help you with everything.
Each state relies on different rules when it comes to establishing a limited liability company. The Limited Liability Company Act, available in every state is responsible for creating the legal rules for establishing and maintenance of an LLC. Below, you will find simple explanations of the regulations governing the formation of an LLC, operating agreements, registered agents, and annual reports. Our complete Limited Liability Guide will help you with everything you need to know to start your own LLC.
Formation Of An LLC
The State LLC statute provides the requirements needed for setting up and creating an LLC. Most states offer mail-in LLC and online filing options to meet these requirements.
General Information Required When Forming An LLC
- Name of the LLC
- Principal office street and mailing address for the LLC
- Registered agent’s name and registered office address
- Is the LLC manager-managed or member-managed?
The job of a registered agent is to accept service of the process (the legal summons to a lawsuit. In most states, a registered agent must meet the following requirements.
- Maintain a registered office in the specific state (no P.O boxes)
- Be an individual, LLC, or corporation. It can also be a foreign LLC or corporation with a business address similar to the registered office address.
An LLC agreement allows members to come up with rules depending on the uniqueness of their LLC. They are known as provisions or terms. The state statute limits operating agreements. For instance, if the statute mentions that LLC members are unable to dissolve their LLC without the agreement of all members, then LLC members will not be able to change or override the statute with an operating agreement. With an operating agreement in place, it’s easier to navigate situations surrounding the operations of the LLC. If a dispute or lawsuit arises, LLC members or courts can always reference the operating agreement. If there is no operating agreement and a dispute arises, the courts rely on the LLC statute to find a resolution.
Creating An Operating Agreement
Some LLCs such as real estate LLCs or professional LLCs might require unique terms while others may rely on standard provisions such as the following:
- Each person’s responsibilities
- Admission of new members
- Transfer or termination of membership for existing members
- Distribution of dividends and profits
- Amendment of the operating agreement
Most states require their LLCs to provide a report every 1-2 years to make sure that the state can access the latest information about the business. Depending on the state, you may have to pay a fee to file these reports. Most states also request this information on an annual or biennial basis.
- The street address of the principal office
- The name, title, and addresses of managers/members
- The name of the registered agent, physical address of the registered office