Setting up shop
Setting up a business can be a difficult thing however with the right steps you can make sure that you set yourself up for success. There are various types of business that you can start that will protect yourself and your customers, however Im going to focus mainly on Limited Liability Company or popularly referred to as a LLC. Keep in mind that this is a very basic way to set a LLC up and I’ll list references to more extensive steps below.
To start you’ll want to create a name for your business and for this post I’ll use a fictitious company name called “Cookies Devoured, LLC”. Now that I have made up the name my awesome bakery company I’ll need to register the name with the Secretary of State. Don’t let this scare you because it’s a rather easy process and can be done roughly in about 15 minutes. What this does is it will check to see if the company name is available and allow you to reserve it with the company’s point of contact (POC) listed below it. Once this is done and processed you will received your Articles of Incorporation in a few days via email. Now it’s official that you are in business but you’ll need to wrap a few things up before you just go off promoting yourself.
There is a very important document called the Operating Agreement which states things like percentage of ownership, voting rights and responsibilities, distribution of profits and losses and how meetings are held. It essentially describes how you do business inside and outside your company. This is on file with the Secretary of State in the state you originally filed and if it’s not on file it can cause a lot of problems for you down the road.
Finally the last big step I will suggest is to file for a Tax Identification Number with the IRS. This will allow you to open a bank account with the business’ information, file appropriate taxes and remove your social from the face of the company. For accounting purposes you want to make sure that there is some sort of a paper trail because you want proof that things were done and AVOID handling any financial matters in cash. You should use either Direct Deposit, Charge Card (Debit or Credit) or the old school version of a check.
For us Oklahomans this Procedures PDF was taken directly form the Oklahoma Secretary of State website on how to start up an LLC in Oklahoma. Entrepreneur.com has listed more detailed steps with their great posting of “Ten Steps to Organizing an LLC”. I mentioned earlier the Operating agreement and with SBA.gov’s “Operating Agreement Basics” it gives you a more in-depth understanding of how it works and also I’ve listed Tech Agreement’s Operating Agreement examples in case you wanted to see examples of how they’re written.
I hope you learned a little bit from what I’ve laid out in front of you because this is a very important issue that you have to follow if you want to startup a company.
My name is Rick Shaw and I am a Web Design & Development student at Francis Tuttle. I’m a partner in a company named 2PM Studios, LLC a Web Design and Business Consulting company in Oklahoma. Follow me on Twitter!
Good Night and Good Luck!