The limited liability company (LLC) has become an increasingly popular form of corporation. It combines the simple ownership and management structure of a partnership with the limitations on owners' liability of a stock corporation. Registering an LLC is a relatively straightforward task consisting of filling out a few forms and paying the appropriate fee. This guide describes the registration process in California. Other states' procedures are similar but may vary somewhat.

Ownership and Management

The LLC as a legal entity is the property of its members, who share equal ownership interests in the corporation and individually possess executive authority to conduct business in the company's name, unless stipulated otherwise by agreement. This is substantially simpler than a stock corporation, in which ownership is vested in shares of stock that can be allocated to different owners, and executive authority rests in a board of directors elected by the shareholders, which typically then delegates day-to-day management to appointed executive officers.

Name Search

The California Secretary of State provides a website where you can check to see whether your proposed corporate name is already in use. Check to make sure your name is not taken already or too similar to an existing name, either of which will cause your application to be rejected.

Fill out Form LLC-1

To register a new LLC in California, download and fill out form LLC-1. The form is straightforward and generally self-explanatory, asking for information such as the proposed company's name and the names of all owners. The only potentially confusing part is the "agent for service of process." All corporations registered in California are required to provide the current mailing address of an agent located in California who will accept delivery of legal documents in the event that the company is sued or runs into other legal issues. If you don't reside in California, there are local companies that will accept delivery on your company's behalf for a fee. Once the form is complete, send it to the address in the "instructions" section with a check for the filing fee. This was $70 in 2009.

Fill out the LLC-12

After your LLC-1 form is processed and accepted by the state government, you need to fill out a "Statement of Information" (form LLC-12) giving the names and addresses of the LLC's managers and agent. This form must be refiled at least every other year, and is required to be filed before you can do things like open a bank account or apply for some additional business licenses.

Other Licenses

Many lines of work require one or more additional licenses to operate legally. At the very least, you will probably need an Employer Identification Number (EIN) from the Internal Revenue Service for tax purposes. These requirements vary considerably from profession to profession and from county to county. Make sure you are aware of all licensing requirements relevant to your particular location and type of business.

Source:

California Secretary of State: HowDdo I Form a Business Entity in California?

California Secretary of State: Name Availability

California Secretary of State: Forms and Fees--California Limited Liability Companies