In last week's Freedom Friday blog and email newsletter I talked about how to start an online business in 2022, and one of the things I talked about was choosing a business entity. I've blogged and talked about this as the most crucial step in starting any kind of business in Oklahoma. For many small business owners, especially if its just yourself, or maybe you and one or two other people, choosing a limited liability company (LLC) makes sense. You might even ask, “I should form my small business as an LLC, right?” Well, I could say “right,” but forming your small business as an LLC is not the end of the story. There is more involved than just checking the box, if you will, forming your small business as an LLC. In today's Freedom Friday blog and email newsletter, I want to share with you all that is involved in choosing to form your small business as an LLC, once you have made that critical decision.
1. Do a Name Search
First of all, if you are choosing to form an LLC, then you need to do a name search with the Oklahoma Secretary of State, and maybe a trademark search, if you're interested in trademarking your business name. In Oklahoma, the Secretary of State will require you to do a name search to make sure you are not using the same name as another business. In some close cases, the “examiners” at the Oklahoma Secretary of State's office will also deny your LLC paperwork if some other company has the same name, or a similar name, to the name you wish to give your LLC. So, before you go any further, if you've decided to form an LLC for your small business, do a name search to make sure the name you wish to give your LLC is available.
2. Get an LLC Operating Agreement
Secondly, every LLC needs an operating agreement. You need to have an LLC operating agreement, even if you have formed your small business as a single-member LLC. When you form an LLC in Oklahoma, the Secretary of State will issue you “Articles of Organization,” which is a public document. This document includes important information, including who the “organizer” is of the LLC, and who the LLC's registered service agent is, but it is not a governing document for the LLC. Every LLC needs an internal document, an LLC operating agreement, which explains how the LLC functions. Its very important to have an operating agreement because this is the first “formality” of the LLC to keep the assets of the LLC separate from the assets of the member(s) (owner(s)) of the LLC. The LLC operating agreement is the same as bylaws for a corporation. Even if you've formed a single-member LLC, you should have a basic LLC operating agreement, and you should consider consulting with an experienced business attorney to help you get this done.
3. Keep LLC Assets Separate From Personal Assets
Lastly, and this is probably the most important issue, you need to keep the LLC assets separate from your personal assets. This is especially important if you formed a single-member LLC. It is very easy and simple to do this. Apply for a federal employment identification number (EIN) with the IRS and then open a business bank account for the LLC's assets and funds. Mixing and mingling might be really fun during Christmas, but it's a big no-no for your LLC business. Mixing and mingling the assets of your LLC with your personal assets can open you to personal liability in breach of contract situations and you don't want to have that kind of exposure as a small business owner.
If you're interested in starting a business anywhere in Oklahoma, or if you already have a business in Oklahoma and you're looking to grow, contact our experienced business attorney Jonathan Krems at [email protected], or call (405) 509-9096 to schedule a FREE strategy session today.
For more information about Liberty Legal Solutions, LLC, please visit our website at http://www.libertylegalok.com/