The LLC is the most popular legal entity to incorporate for new businesses..1 Learn how to make the most of an LLC business entity.
LLCs blend the liability protection of corporations and the pass-through tax status of partnerships.
There are two basic types of LLC: member-managed and manager-managed. Member-managed LLCs are operated directly by the owners of the business. Manager-managed LLCs separate the ownership governance of the business from the management of the LLC.
After you form an LLC, you must maintain it to keep it in compliance. Track the following information for an LLC:
This table summarizes the types of LLC documents and filings:
After forming an LLC, it is imperative to track compliance obligations. Compliance requirements vary widely based on jurisdiction, line of business, and type of legal entity.
Here is how to design compliance tracking:
|Trade name or DBA||State||Yes||Yes||Annual|
Of course, you should substitute actual filing requirements for your business. This table gives you a framework to capture the essentials of any compliance filing.
Not all businesses have a Board of Directors or even officers. LLCs, corporations, and some forms of partnership generally create a corporate structure for governance (a board of directors) and management (officers or managers).
People often serve more than one role so it is important to list officers and directors by role and not by name. In the long run, it is also helpful to track terms of service for each role and person.
Here is the information to track for officers and directors:
Please note that a person can have two different roles with very different terms of service.
LLC owners and investors are usually called "Members." Ownership interests are called "Membership Interests." There are exceptions because LLC statutes are flexible.
You should capture the name of the owner and the percentage of ownership at a minimum.
To preserve the benefits of your legal entity, effective ongoing maintenance is critical.
Exceptions apply ↩︎
Exceptions apply ↩︎
Specify the government agency. ↩︎
Substitute the actual expiration date ↩︎
Add the periodic cycle. There are exceptions. ↩︎