The term “LLC” is an abbreviation for “Limited Liability Company.” Just as the name implies, a LLC is a business formation in which the individual stakeholders are not held personally liable if the company is ever sued.
With most other kinds of business formations, the stakeholders, or shareholders, or board of directors or trustees, are individually liable. This means their property, assets, and personal wealth can be vulnerable if the business is found to have performed illegal activity or another party wins a lawsuit against the organization.
LLCs are gaining in popularity as a business formation, especially for small businesses and riskier ventures. Sole proprietors, partnerships, and shareholder corporations do not provide this added level of protection for the individual.
- Unique Name: The name cannot be the same as other companies or official organizations. For example, a LLC cannot have the name “bank” or “treasury” in it as it can create confusion for consumers. But it must have the words “LLC” or “Limited Liability Company” in the name.
- Registered Agent: meaning someone within the State of Indiana who can accept formal documents and paperwork on behalf of the company.
- Articles of Organization: a document that explains the entire structure and purpose of the LLC; it must be kept on record with the Secretary of State of Indiana.
- EIN: a tax identification number that is required to hire employees and pay taxes.
The necessary paperwork can be found at the website for the Secretary of State. The different parts of the application will require an application fee. They may also take a while to process, but they can be submitted online.
An operating agreement is not required to form a LLC in Indiana, but it will be a good idea to create one. It is a document that outlines the ownership and operating procedures of the LLC. It does not need to be Secretary of State, but it can be used and relied upon in the event of a dispute between members of the LLC or if a LLC member needs to be added or removed.
There is no residence requirement for Indiana LLCs. This means that the directors or managers of the LLC can live anywhere they would like and can still open up the business in Indiana.
While you must register an agent with a physical address in Indiana for your LLC, the directors or managers names do not have to be listed or included in the bylaws or articles of organization.
LLCs cannot outlast its founding members. When they die, the LLC dies. It also cannot survive if it goes through a bankruptcy proceeding. It is also very difficult to take an LLC public, which is often the next step for companies that generate a large profit.
The State of Indiana requires that LLC file a report every two years. This is called a biennial report, which requires a filing fee, and it must be filed when the anniversary month of the corporation has occurred.
If you would like to form an LLC in Indiana, you should speak an Indiana business lawyer immediately to be sure your incorporation process is smooth and legally sound.