So...Am I an LLC now?

Question

I submitted my information and filing fees to my Secretary of State through their online filing system.  They e-mailed me an automated receipt confirmation.

Anything else I need to do?  Do I need to file the Articles of Organization or is that just for my own use?

Do I need to register with a fictitious name?

I am hoping to open a bank account in my LLC's name soon, so let me know what additional steps are necessary for that.

Thanks!

Mitch Kronowit · Answer

Gabriel, this may sound like a trivial point and possibly something you're quite aware of, but asking "Am I an LLC now?" denotes an improper perspective regarding a Limited Liability Company or Corporation. Please understand I'm not jumping on anybody's case here, but there are several new investors and entrepreneurs on this forum that could misconstrue the relationship between a legal entity and themselves with that question in mind.

Forming an LLC does not make YOU an LLC. You and your LLC are separate legal entities who stand independent from one another. Yes, you may own and control the LLC, but it isn't you and you are not it. This concept is very important because the liability protection afforded by a Corporation or LLC can be diminished or even eliminated if the principle of "Alter Ego" is ruled to apply to your entity. Therefore, it is paramount that everybody adopt the mentality that their LLC or Corporation is a separate being from themselves. Avoid drawing or implying any similarities between you and your entity. Always refer to your entity as such and not to yourself.

Again, forgive me if you completely understand this, but I've said it many times on this forum before (and will probably repeat it again) - language is important (in the legal arena it's critical) and BP is a very large learning forum, so we must be careful not to instill any inaccurate or misguiding information that could steer somebody towards an erroneous perception.

Jon Holdman · Answer

Now, if there are more than one member, then the LLC will have to file a partnership return and divide up the profits and losses.  Again, these end up each member's tax return.

Good record keeping is important, nonetheless.

Jeff N. · Answer

Mitch, I may be going off topic here, but not always the case. A few years ago I hired some additional employees (out of state) for my business to answer emails for my company from home. I always did my own payroll, but I neglected to contribute to one of the out of state employees workers comp fund in NY (100% my fault). I received a letter in the mail a few months after her start date requesting the immediate registration into workers comp for the employee, which I did. A few weeks after that I received fine of ~$25k ($250/day penalty) for the days she wasn't registered for workers comp in NY. On the penalty form was information to challange this decision and it stated that I could not represent myself, I was required to have representation if I were to go forward, and that LLC's for workers comp cases where not recognized in the state of NY. All penalties are directed at the members, not the LLC.

Anyway, long story short, I was penalized directly, NY did not recognize my LLC. BTW, lesson learned, I no longer attempt to do payroll myself. I have found it's nearly impossible to run a business and be responsible for payroll. It pays to hire someone that knows what they are doing.

Joe O · Answer

Did you end up paying that fine or finding representation and challenging it, or what?

You left out the exciting conclusion!  :D

Steven Hamilton II · Answer

Don't hesitate to ask any tax questions here. We have several members who enjoy tax questions and several such as myself who specialize in tax law.

Carole M. · Answer

Make sure you keep good records of Income and Expenses as you will be required to file a tax return for the LLC every year, starting this year.

Now is the time to sit down with a tax pro.

Gabriel A. · Answer

I now have an EIN!

Thanks, as always, for your help BP.

Bill Walston · Answer

Congrats on forming your LLC!  I'm glad that you're not making the mistake that so many folks do by thinking "that's all there is to it."

You should not have to register a "fictitious" name.  Your company is an LLC and so there's nothing fictitious about the name.  You MAY have to register and get a business license however.  That varies from state to state.  Your local city or county clerk will be able to give you that information.

Your LLC needs an operating agreement.  This is true, even if you are a single-member LLC.

Get with your tax pro to hash out a good tax strategy.  He/she will best be able to advise you on whether you should accept the default tax classification or make a corporate tax election for your entity.

As Jon said, you should get an EIN before opening your bank account.  You can apply online here

Hope this helps!

Jon Holdman · Answer

They should give you the "articles of organization".  That's just a document (one page here in CO) that shows you actually registered with the state.  Go to the IRS web site and get an EIN (employeer id number).  Take the articles of organization and the EIN paper to the bank and that should be sufficient.

So...Am I an LLC now?

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