An LLC is an abbreviation that stands for a type of business structure that is known as a limited liability company. Specifically, an LLC offers many benefits to its owners, including the limited liability advantages provided to those who own corporations mixed with the tax and management arrangements of the partners in a general partnership.
Unlike the owners of many different types of business structures, however, the members of an LLC cannot be held personally liable for the losses or liabilities that a business incurs. For instance, if an LLC is indebted to a creditor or lender, the creditor or lender must file a lawsuit directly against the company itself.
Again, the members of the LLC cannot be held personally liable for the debts of the business. This means that the personal property, wealth, and/or any other assets that belong to an individual LLC member cannot be reached by a creditor or lender to pay off debts accrued by the company.
Another benefit to forming an LLC is that its members may select how they want the business to be taxed. For example, the members may opt to structure an LLC in such a way that it can avoid having to pay federal taxes. Allowing members to choose how they want to be taxed under an LLC formation can also help them to avoid the double-taxation issue that is often experienced by the owners of a C Corporation.
Given their flexible nature and the number of advantages that an LLC can offer its members, this type of business structure is becoming an increasingly popular choice when it comes to establishing a business. This is especially true in regard to start-ups, small businesses, and business ventures that pose considerable risks to the owners.
Additionally, while partnerships, corporations, and sole proprietorships also offer several advantages to their business owners, they are nowhere near as well protected as a member of an LLC.
To learn more about how to form an LLC in the state of Indiana and, you may want to consider contacting a qualified business law attorney who practices law in your Indiana county.
What are the Requirements for a LLC?
There are many requirements that must be met in order to form an LLC. Although these elements may vary by state as well as by company policies, the general requirements for a standard LLC will likely include the following:
- Unique business name: The members of an LLC must give their company a unique business name that is different from other companies or already established organizations. For instance, the members cannot register the LLC under a generic name, such as “state department” or “bank”, since this will likely confuse customers. However, an LLC must use its abbreviation or the words “Limited Liability Company” within its name.
- Articles of organization: The members of an LLC must also create an Articles of Organization document for the business. This particular document outlines the structure and the purpose of the LLC being formed. For those who form an LLC in Indiana, a copy of a business’s Articles of Organization must be kept on record and filed with the Secretary of State.
- Registered agent: LLCs that are formed in Indiana must designate someone within the state as the official point person in the business who can accept subpoenas and other legal documents on behalf of the LLC.
- Employer identification number (EIN): An LLC must also have an employer identification number in order to pay company taxes and hire employees. An employer identification number, which is commonly abbreviated as EIN, is essentially a tax identification number that indicates the LLC is registered with the Secretary of State and thus is permitted to operate as a fully functioning business.
- Continuous maintenance: Continuous maintenance is a requirement that is specific to LLCs based in Indiana state. This requirement refers to the duty that an LLC has to file a biennial report with the Secretary of State every two years. A biennial report typically must contain the name of the LLC, the name and physical address of an LLC’s registered agent, and the physical address of its main office. It also requires a filing fee of $30 if it is filed in person, or $20 if the report is submitted online.
What Paperwork Do I Need to Form a LLC?
As previously mentioned, the requirements to form an LLC will often vary by jurisdiction. Accordingly, the documents to register as an LLC also tend to change based on the state and different laws. The majority of states provide such paperwork on the website for their respective Secretary of State. Additionally, it should be noted that some forms may require the members to pay an application or filing fee.
In particular, the state of Indiana does not require a standard operating agreement in order to form an LLC. However, it is generally recommended that a business create one since this document can be used as guidance on the various procedures and ownership duties implemented in the LLC.
An operating agreement document can also come in handy when there is a legal dispute amongst the members of an LLC or if an LLC member needs to be removed or added to the company.
What Benefits Does Indiana Give to a LLC?
Unlike some states, Indiana state law does not require residency for an LLC. This means that the owners or members of an LLC based in Indiana can live wherever they want and still maintain an LLC in Indiana. As discussed above, the only residency requirement for an Indiana-based LLC is that the company must appoint a registered agent who also must maintain a physical address within Indiana.
On the other hand, none of the members or owners of an LLC will need to be listed on company documents nor will they need to be included in the company bylaws or Articles of Organization document.
What Disadvantages Does Indiana Give to a LLC?
As mentioned in an earlier section, one of the disadvantages of forming an LLC in Indiana is that members are required to file a biennial report every two years. While this may not seem too burdensome, keep in mind that the LLC will need to pay the filing fees each time they submit a report. The state may also increase the current amount of filing fees whenever it wants.
Another disadvantage to forming an LLC in Indiana is that the laws regarding ownership transfer in an LLC are very difficult to overcome. For instance, if a founding member of an LLC dies and they do not have a clear probate plan in place, the LLC may be dissolved. A similar problem may also occur when an LLC files for bankruptcy.
One last disadvantage of forming an LLC is that the size and share structure of LLCs make it hard to take the business public. A company will normally want to go public in order to grow and expand its business. Going public can also help a business to yield greater profits. Unfortunately, with an LLC, becoming a public company can be a challenging task.
Where Can You Find the Right Lawyer?
While not every situation will necessarily require the assistance of a business lawyer, there are certain legal issues or disputes that can arise in connection with forming an LLC in the state of Indiana.
For example, it is generally recommended that you hire a lawyer if you encounter a legal issue, such as filing for bankruptcy as an LLC, or get into a dispute with another party like if that party breached the terms of a business contract associated with an LLC.
In such instances, it may be in your best interest to speak to an Indiana corporate lawyer in your county for further legal guidance on forming an LLC or resolving disputes involving an LLC. An experienced business lawyer in Indiana will already be familiar with the laws and procedures required to form an LLC in the state. Your lawyer can also confirm that an LLC structure is the best model for your particular company.
In addition, your lawyer can assist you in drafting and filing any necessary documents to establish an LLC or to enter into agreements with outside parties. Lastly, aside from providing legal representation in court, you may also want to hire an Indiana business lawyer to help you with the sale or purchase of an LLC that is based in Indiana.
On a final note, some places where you can start to search for the right Indiana business lawyer to take on your LLC matter include:
- The Indiana State Bar Association and/or any of its county-specific branches;
- Indiana Legal Services, Inc., which is a not-for-profit law firm in the state;
- The Indianapolis Legal Aid Society;
- The Self Service Legal Center, which is located on the main court website for Indiana;
- The Volunteer Lawyer Network; and
- LegalMatch.
