The following information is provided for educational purposes only and in no way constitutes
legal, tax, or financial advice.
For legal, tax, or financial advice specific to your business needs, we encourage you to
consult with a licensed attorney and/or CPA in your State.
The following information is copyright protected.
No part of this lesson may be redistributed, copied, modified or adapted without prior
written consent of the author.
A Limited Liability Company is a hybrid between a Corporation and a Partnership.
An LLC protect your assets in the event of a lawsuit.
In order to form your LLC, you must file LLC Formation Documents with the Secretary of
State.
Once your documents are approved and sent back to you, your LLC is now in existence
and authorized to do business in the State.
We have spent considerable time to make the details of this video simple and easy to understand.
However, we cover a lot of ground and you are going to hear a lot of new terminology.
We do recommend that after you watch this video, you watch it a second time in order
to fully comprehend all the information provided.
Please make sure you have watched the first Lesson on researching your LLC's name.
Your desired LLC name must be available for use before you proceed with filing your LLC
Formation Documents.
Your LLC is required to list a Registered Office and a Registered Agent within your
LLC Formation Documents.
The Registered Office is a physical address (it cannot be a PO Box) that is located in
the State where your LLC is formed.
A Registered Agent is a person or a company who agrees to accept legal mail and important
documents on behalf of your LLC.
The Registered Agent is located at the Registered Office and is generally accessible during
normal business hours.
As we mentioned, a Registered Agent can be a person or a company who has an address in
the State where your LLC is formed.
You, as an individual, can be your LLC's Registered Agent.
However, your LLC cannot be its own Registered Agent.
For individuals who have an address in the State, it is most common that they serve as
the LLC's Registered Agent.
Having said that, the individual person you choose as the Registered Agent does not need
to be a member of the LLC.
It can be a friend or a family member, or, frankly, anyone you know who agrees to accept
Service of Process on behalf of your LLC.
Service of Process is the delivery of legal mail and important documents sent from the
State or a law firm to your LLC.
Correspondence from the State can include items such as Annual Report notices, late
notices, and copies of Formation Documents.
Legal documents can include items such as subpoenas, and/or complaints for legal action.
Again, the purpose of designating a Registered Agent is to authorize someone to accept Service
of Process on behalf of your LLC.
Whoever agrees to be your LLC's Registered Agent must agree to do so.
Some states require that they sign your LLC Formation Documents, but California does not
require this.
You will just need to list their name and address within your LLC Formation Documents.
Takeaways.
The purpose of a Registered Agent and its Registered Office is to be a point of contact
for the State and to accept Service of Process for your LLC.
You or someone you know can be your LLC's Registered Agent, so long as you have an address
in the State.
Of you don't have an address in the State that you can use, or don't want to serve as
your LLC's Registered Agent, you can hire a Commercial Registered Agent.
Using a Commercial Registered Agent will also help protect your privacy as the information
listed in the LLC Formation Documents will become public record.
A Commercial Registered Agent is a company that specializes in receiving Service of Process
on behalf of businesses nationwide.
They typically charge between $100 and $300 per year.
If you decide to use a Commercial Registered Agent, we recommend Northwest Registered Agent,
LLC.
They have been in the business for more than two decades and have built up a solid reputation.
Their fees are among the most affordable, and their support is top-notch.
We've joined forces with them in order to provide Registered Agent services nationwide
to your clients.
There's a link below this video where you can find instructions on how to sign up for
their Registered Agent services.
Now, let's discuss your LLC Formation Documents.
The name of the LLC formation document for the State of California is called the Articles
of Organization.
This document is not complicated and contains basic information, including listing your
Registered Office and Registered Agent.
We will walk you through the details of the Articles of Organization in just a couple
minutes, and we will make sure you get it filled out correctly.
Once your Articles of Organization are completed, you will need to submit them to the State
along with the filing fee.
You will find the filing fee amount, accepted forms of payment, and the address where to
send your Articles of Organization to below this video.
Your Articles of Organization do not need to have original signatures.
You can file your original, or you can file a copy if you prefer.
It is a good idea however, to keep a copy for your business records.
Once you mail the filing fee, along with your Articles of Organization, the State will review
and process your paperwork.
If there are any issues with your Articles of Organization, the State will mail back
a letter with instructions on what needs to be corrected.
If there are no issues with your filing, the State will mail back a stamped approved copy
of your Articles of Organization within approximately 10 - 15 business days.
Once you receive your stamped and approved Articles of Organization, your LLC is now
a legally formed business in the State of California.
Please keep a copy of this document with your business records.
Do not order your EIN (also known as your Federal Tax ID Number) or start to use your
LLC for any business purposes until you have this approval.
California has additional ongoing requirements (and fees) that must be submitted in order
for your LLC to remain in compliance.
Failure to file these items on time will result in the State charging late fees and they may
dissolve (or shut down) your LLC.
The first of these requirements is the initial Statement of Information.
It is due within 90 days of approval of your LLC and the filing fee is $20.
Your next requirement will be your Annual LLC Franchise Tax.
Your Annual LLC Franchise Tax will be due every year and will be a minimum of $800.
Then, every two years, you will have to file an updated Statement of Information.
The cost will remain the same at $20.
These additional filing requirements are discussed further in Lessons 5 and 6.
Don't worry, we will walk you through completing the paperwork for both.
We are now ready to fill out the Articles of Organization.
You can download this document below the video.
Let's get started.
Here we are, inside the Articles of Organization.
This is a 1-page PDF document.
The form can be filled out on the computer or it can be printed, and then filled out
by hand.
If you fill it out by hand, please use blue or black ink.
Make sure to print the document on white paper that is letter-sized (that's your standard
8.5 by 11 inches).
Also, please note that I have a professional version of Adobe Acrobat.
You may just have a simple version of Adobe Reader, and you may not have as much functionality
in order to edit and type inside the document.
If that's the case, simply print the document and then fill it out by hand.
You'll notice at the top of the Articles of Organization, they mentioned the filing fee.
The next paragraph that says a separate non-refundable $15 service fee, this is only if you drop
the application off in person so this is not applicable.
There's also a notice here regarding the minimum $800 Annual Franchise Tax fee.
We have details and instructions and documentation on that for you in Lesson 6.
Before we get started, one other thing to note at the bottom of this document, you will
have a PO box and the address where to send these documents to.
Make sure that you double-check and you cross-reference this address with the address that we have
listed below this video.
You may be watching this video in the future, and we want to make sure that you have the
most up-to-date address and you're not just looking at the address that you see on the
video right now.
And one last thing, if you're filling out this document on the computer, they did kind
of mess it up a little bit, so down underneath Service of Process, they have like this extra
line, and then down here there's an extra line, but those don't need to be filled out.
All right.
let's get started.
To save time, I've already filled this document out, so let's go through each section together.
Under Section 1, I'm going to list the name of my LLC.
For this example, I've used "ABC Widgets, LLC".
Make sure that you include the letters "LLC" or "L.L.C."
at the end of your name.
And in this example, I've used a comma, but the comma is not required so it's a personal
preference.
You can use one if you'd like, or you can leave it out.
Section 2, you don't need to do anything there.
It just says that the LLC is authorized to do any and all lawful activities within the
State.
Next in Section 3, you're going to list the address of the LLC.
This cannot be a PO Box, so this could be your home address, or could be a business
address.
Next in Section 4, we're going to include the name of the Registered Agent and the Registered
Office.
For this example, let's say that I'm John Doe.
I'm going to be the Registered Agent for this LLC, or for my LLC.
So, I'm going to put my name here, and again I'm going to put my address once again.
Let's take a look at another document if we were to use a Commercial Registered Agent.
I have one filled out over here.
Let's scroll down.
Let's say for this example I've used Northwest Registered Agent.
One thing to make note of if you're using a Commercial Registered Agent which is already
registered with the State of California (which most likely they are), you don't even have
to include their address.
You simply just list their name under Section A. So in this case I've just listed "Northwest
Registered Agent, Inc." and they include their Registration Number there.
So pretty much the documents are very similar: if you have a Commercial Registered Agent
you're just going to list the company name on A.
You don't even need to list the name on B. For this example, this is myself acting as
a Registered Agent for the LLC.
If it was a family member at a different address, I would simply just put their name there and
enlist their address in B. Under Section 5 for Management, you're going to check off
that the LLC will be managed by all Limited Liability Company (Members), and that's it.
It's a pretty simple document.
Down below, you're just going to print your name, and then once you print this document
out, you'll simply sign above the line here that says "Organizer".
One question that customers do ask is whether or not this document needs to be notarized.
It does not.
You'll simply just print it out, sign it, send this in with your filing fee, and in
about 10-15 business days you'll get back this document with your stamp of approval.
Pretty simple, let's just do a quick one-through once again.
At the top, Section 1, you're going to list the name of the LLC.
Section 2, there's nothing to be done there.
Next in Section 3, you're going to list the address of the LLC.
Now this doesn't have to be an official business address or anything of that sort, it can be
a home address or it can be a business address if you do have one.
Under Section 4, you're going to list the name and the address of the Registered Agent
if it's an individual person.
If it's a Commercial Registered Agent that is registered with the State, over in this
example we're just going to list their name on line A and we'll leave line B blank.
so for this one, I've used myself as the Registered Agent and I've included my address.
If you're using a friend or family member, you just switch and put their name on A and
their address on B. Section 5 for Management, you check off "All Limited Liability Company
(Members)" will be managing the business, and you're going to print your name here,
print this document out, and sign on this line.
Again, once you submit everything to the State, you're going to get back a copy of your Articles
of Organization with a stamp of approval, and that will arrive in approximately 10-15
business days.
And that concludes this Lesson.