Establishing a new business is a stressful and often confusing time for entrepreneurs. Even if the process is something that they have dreamed about for a long time, it is overwhelming. Dowd Law has been helping small businesses get their start for over 20 years. In this article, we have compiled the basics of what entrepreneurs need for LLC setup. Read on to learn all about these important components, and contact us with any follow up questions about LLC setup or other business startups.
What Is An LLC?
A LLC is a limited liability company. The main difference between a LLC and a corporation is ownership and taxation. LLCs are like a hybrid between a corporation an a partnership, and owned by one or more individuals. On the other hand, a corporation is owned by shareholders.
Another major difference is how the two entities are managed. LLCs have a much more flexible management options than corporations do. The tax structure is also more flexible than a corporation’s.
An operating agreement is one of the pillars of establishing an LLC. The document outlines the business’s financial and management procedures. It determines the best practices in running the businesses for the specific members of an LLC. Once the members sign the operating agreement, it becomes a legally binding contract.
What’s in a name? Well, as it turns out, quite a bit. However, choosing a name for your company can be daunting. A unique name that also connects with the function of the business is difficult to come up with. The name search is a way for the Florida Division of Corporations to make sure that companies do not have overlapping names. The name search is done using the SunBiz website.
For example, if you decided to start an LLC called “Fix Quick”, you would search Fix Quick under the “search by name”. There are a variety of similar names registered with the Florida Division of Corporations. The preliminary search shows the type of business that is registered under the name. It also shows whether or not the business registered under that name is active.
The Division of Corporations has some rules concerning how an LLC can be named.
- The name must be distinguishable from other names registered in Florida. There are certain rules, which you can find here, about what makes a name distinguishable vs. indistinguishable. A good rule of thumb is that if another business exists with a nearly identical name, your choice is not distinguishable.
- Whatever you pick for the name must be followed by ‘Limited Liability Company’, ‘LLC’ or ‘L.L.C.’
Come Back Next Week
To learn what is on the rest of the LLC Setup Checklist.