Some business owners may decide to register their company as a limited liability company (LLC). This is often because LLCs provide benefits that are not available to other types of business structures, such as limited liability for its owners and “pass-through” taxation that allow for LLC owners to avoid paying a corporate tax on profits. In the state of Oklahoma, you have to register your business as an LLC with the Oklahoma Secretary ate in order to make it an LLC.
What are the Requirements to Form an LLC in Oklahoma?
A main requirement for establishing an LLC is coming up with a business name that is not currently in use. The name must also include the term “limited liability company” or “limited company”, or an abbreviation of either of those terms. In order to ensure that a business name will be theirs to use, business owners have the option to reserve their company name by filing a Trade Name Report.
In addition to deciding upon a name, the LLC needs to obtain a registered agent in Oklahoma who can accept service of process. Otherwise, the Oklahoma Secretary of State will appoint itself as the LLC’s registered agent and charge the LLC an annual fee of $40 for this service. Finally, the LLC has to file specific items of paperwork with the Oklahoma Secretary of State.
What Paperwork Do I Need to Form an LLC in Oklahoma?
You can file your paperwork as a domestic LLC or a foreign LLC online through the Oklahoma Secretary of State’s website or via mail. Domestic LLCs are companies that were created in the state of Oklahoma. These types of LLCs are required to file Articles of Organization.
Foreign LLC are those that were originally created in a different state or country. These kinds of LLCs must file an Application for Registration and a Certificate of Good Standing from the state where the company originated.
Both the domestic and foreign registration forms require you to state the company name, address, and email address, the latter of which is required to receive the notice for the annual certificate. You will also be required to list the name and address of the registered agent and how long you want the LLC to last, which can be indefinite.
What Benefits Does Oklahoma Give to an LLC?
A main benefit of creating your LLC in Oklahoma is that you are allowed to be anonymous, which is not permitted in most states. The forms does not specifically ask who owns the LLC. So, even though there is a registered agent listed, the actual owners, also known as members, does not have to be listed.
In addition, unlike other states, Oklahoma does not require that LLCs pay an annual franchise tax. Finally, Oklahoma provides protection for the business interests of the members of an LLC. If a member of an LLC has a personal debt to be paid, the creditor cannot ask that the member sell their membership to cover that debt.
In addition, they are also not held personally liable for any violations stemming from the company (this is the meaning of the term “limited liability”). On the other hand, the individual LLC members may still be held liable for violations that are the result of their own negligence or illegal conduct (such as engaging in insider trading or other individual violations).
What Disadvantages Does Oklahoma Give to an LLC?
Although the state of Oklahoma does not require LLCs to pay annual franchise taxes, it does require an LLC to pay a $25 fee each year. The fee is needed to file an Annual Certificate, which all LLCs are required to file on the anniversary date of their registration.
It is important to note that recently, some Oklahoma counties seem to have become more friendly towards plaintiffs instead of LLCs. In particular, Pottawatomie county has been favoring and providing larger amounts to plaintiffs. This is not a strict rule, but it is a trend that you should be aware of if you plan on forming your LLC in Oklahoma.
Lastly, LLCs may be associated with various restrictions that are not always present in other forms of business structures. For instance, LLC members may often be restricted when it comes to the amount of control that they can exercise over important company decisions.
Other forms of businesses like partnerships or sole proprietorships may have more streamlined decision-making processes. This is important to consider, especially when important projects or pivots with the business need to be handled.
Do I Need a Lawyer to Form an LLC in Oklahoma?
Forming an LLC has many requirements and documentation to complete. If you want to obtain all of the benefits of an LLC, you want to make sure you create it correctly. A business lawyer in Oklahoma can help you set up and register your LLC. A business lawyer in your area will help you make sure you are not making any mistakes while organizing your business.