Several factors are about to contribute to the improvement of employment figures in the US. These include business recovery and the growing number of startups. According to the US Bureau of Labor Statistics, over the decade of 2020 to 2030, total employment is set to increase by 11.9 million jobs.
LLC formations are the most popular business formations chosen by business owners. However, as they enter the world of business, these new entrepreneurs need to be aware that rules and regulations change often in the business world.
Currently, the most important changes businesses owners need to know about are those concerning US employment laws. These changes include higher minimum wages in more than half the states and the increase in state-paid leave due to employees. These laws are written by state legislatures and are not implemented in all states, but new business owners must know the new employment laws for their state.
The services of a registered agent are also vital to every business, and must be registered at the formation of the business.
Understanding LLC formation
In the initial stages of their business formation, startup owners need to invest their efforts in the formation of their LLC before worrying about employment laws. Through the formation of a limited liability company, each business owner aims to protect their personal assets from lawsuits.
Like employment laws, each state has its own LLC legislation statutes. These laws govern everything from starting, running, and maintaining an LLC. The rules are set down for the formation, operating agreement, annual reports, and registered agent requirements of every new venture.
The Really Useful Information Company (TRUiC) provides useful links and guides to the laws of all 50 states, making the filing process easier to find for startups in any state.
Meeting the formation requirements
State formation requirements only differ slightly between the various states. In most states, these requirements include providing the LLC name, a physical address for the business, the name of a registered agent, and the details about the LLCs management (member-managed or manager-managed). Together with the filing fee, the formation requirements can be submitted online or by mail.
When choosing a name, the new business owner must ensure the name is not used by any other business in the state. In most states, it is easy to determine if the chosen name is already taken.
Choosing a registered agent
Most states require that a business uses the services of a registered agent when forming. Registered agents act as go-betweens that receive information and pass it along to the business owner. This information could be anything from service of process, informing about a pending lawsuit, compliance notices, taxes due, and other business correspondence.
The requirements for a registered agent in most states are that they maintain a physical address in a registered office. The registered agent must have a business address that is the same as the registered office address in the state where the business is filed. Registered agents can be individuals or companies.
Some business owners opt to serve as their own registered agents or to appoint someone close to them. This is possible in most states, but that person must be available during normal business hours to receive notifications. They must also have a physical address in the state where the business is formed.Watch this video for more information.
Outlining LLC policies with the LLC operating agreement
In the LLC operating agreement, a business outlines the terms about how their LLC will operate. However, these terms must adhere to the limits placed by the state laws. The operating agreement is not required by all states, but drafting it offers every business an important outline of the way the business will be run. Operating agreements can be vital for restoring disputes if ever needed.
Important details to include are the organization of member responsibilities, board managers, voting requirements, share transfer restrictions, division of profit and losses, and the process required for any amendments to the agreement.
Importance of a registered agent in maintaining the LLC
Once an LLC is running, it must remain compliant by meeting various requirements. These include permits and licensing, employee benefits, tax payments, and annual reporting.
The annual report is filed to ensure the state is updated about any changes to the LLC’s address, registered agent, name, and members. Depending on the state, these reports are filed either annually or every two years.
Registered agents offer more than just the relaying of information. Their services include filing for an LLC and ensuring all state and federal requirements are met. An important service for every LLC today.