The Mom Entrepreneur Blog Has Moved!

We are now using Wordpress. You should be automatically redirected in 5 seconds. If not, visit and update your bookmarks.

How do I form an LLC?

Monday, October 12, 2009
In celebration of Women’s Small Business Month, we are continuing our series on Limited Liability Companies (LLCs) and how to protect yourself in business. If you missed part 1, click here…>

I chose to form an LLC in order to have better protection. As a business owner, you hope you never need to worry about being sued, but it is smart to have as much legal protection as possible. I had a client threaten to sue me for non performance; instead I sued him for not paying. We eventually settled, but I felt a lot better knowing I had additional protection on my assets.

Adam Bergman, Esq., president of continues to answer our questions this week about how to form an LLC.

TME: How does a business owner go about forming an LLC?
Adam: An LLC is a separate legal entity that is formed under the authority of a state statute. All fifty states and the District of Columbia have enacted limited liability company statutes. An LLC is formed under, exists, and is governed by a state statute. In general, the state statute provides how an LLC in that state is formed, registered, and terminated. The statutes also generally provide that either the LLC adopt Article of Organization, an Operating Agreement, or use the default provisions of the statute to determine the other matters which impact the operation of the LLC.

In most cases, forming a LLC is as simple as filing a 1 page form often called the Articles of Organization. This generally consists of a number of straightforward questions such as the name of your entity, address, and the LLC’s purpose along with the state filing fee. You may form your own LLC for free; since all the forms and information necessary is located on each Secretary of State’s website, or you can hire an attorney or formation company to form it for you for a fee.

TME: What is an LLC Operating Agreement?
It is extremely important that every LLC have an LLC Operating Agreement. The LLC Operating Agreement is the core document that is referred to when issues concerning the LLC need to be resolved. The LLC Operating Agreement is the most important document for your LLC. It reflects the agreement among the members with respect to the affairs and management of the LLC as well as governs the relationship amongst the members of the LLC. By having an LLC Operating Agreement, the members will be provided with a clear set of rules that all members have agreed upon greatly reducing the likelihood of disagreement between them in the future. A LLC Operating Agreement will also greatly reduce financial and management misunderstandings, and make sure your business is governed by your own rules -- not default rules created by your state.

Thanks Adam! Join us next Monday for part 3 – Why does every LLC need to have an operating agreement?

In addition, we are offering a free teleseminar entitled: Protecting Yourself in Business - Why Every LLC Needs an Operating Agreement on Thursday, October 22nd from 1:00 pm - 2:00 pm EST. To register, click here...>

About Adam Bergman:
Adam Bergman is the president and creator of, the leading online provider of customized LLC Operating Agreements. Mr. Bergman has worked as a corporate and tax attorney at White & Case LLP, Dewey LeBoeuf LLP, and Thelen LLP, three of the most prominent law firms in the United States where he advised thousands of entrepreneurs and business owners on a wide range of corporate and tax issues involving limited liability companies for the past seven years. Adam Bergman is recognized as a leading partnership tax expert and has lectured attorneys on the taxation of LLCs.