LLCs are popular in many states today because of their easy approval process. Because they operate on the state level, they don’t need a lot of paperwork, and many times there is little to no risk involved when starting an LLC business. However, there are still problems that new entrepreneurs and businesses run into. If you are considering the option of opening an LLC, here are some of the most common mistakes that you could encounter.
The first mistake is failing to register the company properly. In order to start an LLC, you must register it as a corporation, so all of the filings and paperwork that are required for LLCs must be done accordingly. Some of the forms that you will need include the Operating Agreement, Articles of Organization, Business Model, and Operating Agreement, and Memorandum and Articles of Association. You must ensure that everything is filed appropriately.
The next mistake that you could make is not selecting a location for your LLC. All LLCs must have an office, or more than one, where all of the business dealings of the LLC will take place. Otherwise, there would be no way for anyone but the actual owners to do anything with the company, and they wouldn’t be able to protect their liability or ownership status.
Another common mistake is failing to file all of the appropriate paperwork. This means that even if you are starting an LLC to hold a garage sale, you still have to file the necessary paperwork with the county. Without this paperwork, you won’t be allowed to open the business, and you’ll be held liable for everything that happens in the garage sale. For example, if someone accidentally drops a box down the street, you could be held liable for the cost of the damages. If you aren’t sure what all of the legalities are regarding your particular set of circumstances, then consult with a qualified lawyer before beginning an LLC.
The third mistake that is commonly made is assuming that they can save money on doing things themselves. This doesn’t mean that you should try to become the sole provider for the business, but you shouldn’t assume that you can skip the services of a lawyer entirely. When you add up all of the costs that you’ll incur if you don’t hire a lawyer (such as court fees), it’s very possible that you could save a lot of money by handling everything yourself. However, you should only do so after consulting with an accountant or other business professional about how much it would actually cost you to hire professionals to handle everything.
Hopefully, you won’t have to make any of the above mistakes when you open a Limited Liability Company. Even if you aren’t planning on opening an LLC, you should never ignore the advice of a qualified lawyer when it comes to incorporating your business. After all, you want to make sure that your LLC creates the proper structure so that you’re not held personally liable for anything that happens in your business. While making mistakes along the way, you may also find yourself unexpectedly being responsible for many of the things that occur within your business.