When you decide to form a business, it can be an exciting time. But, at least in some states, formally getting the limited liability company (LLC) paperwork done takes longer than expected.
It’s not like ordering a product online, where you can expect to receive your goods at a specific time and can track your package along the way. With government agencies, there can be unknown delays. Find out more about LLCs, including how to form an LLC and how long it takes, below.
What is an LLC?
A LLC is an independent legal entity created under state law. All 50 states, as well as the District of Columbia, have enacted statutes that provide for limited liability company status.
While each state maintains its own specific set of rules and requirements for setting up an LLC and processing the paperwork, they all allow you to file the documents either online in mere minutes, or by regular mail, over a period of days or weeks.
LLCs are owned by investors known as members, and generally, the company is managed by a designated member or a larger group. Similar to the role of shareholders in a corporation, the liability of the LLC members is limited to the amount of the investment of those members.
The state statute sets the rules
State statutes provide the way in which the LLC in that particular state is created, registered, and dissolved.
he statutes usually also indicate whether or not the LLC is required to include articles of organization, an LLC operating agreement, or instead allow certain default provisions provided by statute to determine the proper setup.
How to create an LLC
As noted, starting an LLC requires a several steps, including filing of the articles of organization, which may be accomplished by mail, in person, or sometimes electronically, through the appropriate department for the state where the LLC is being set up.
General information, such as name, business address, member names, dates of birth and signatures of the owners are required to be submitted to the state.
How long does it take to create an LLC?
How long it takes to create an LLC varies by state. Depending on how fast the state processes business filings, it can generally take between a week to ten business days.
In some states, once your intake information is received, the state agency often issues approval for the limited liability company within only three business days.
There are, however, times of the year when it can take longer than expected, so you’ll want to plan accordingly. Usually, there is a heavy filing volume at the beginning and end of the year.
Once your LLC is officially filed by the state, it can be structured to resemble a corporation, to ensure the limited liability protection benefits of a corporation, while at the same time, providing the most basic level of benefits of taxation as found in a partnership.
Payment of the filing fee (ranging from $100 to $1,000, depending on the state in which your documents are being filed) is necessary before the state will grant approval for your LLC. The LLC articles of organization will not be processed until your full payment is received by the state.
In many cases, creating an LLC is as simple as filing a single page form with the state—often called the articles of organization or certificate of organization, depending on the state—along with the state filing fee.