| Nearly all small businesses should form entities to limit | | | | Limited liability companies are simple structures and are |
| their exposure to civil liability in the form of lawsuits. In | | | | the creation of creative politicians in Wyoming. In 1977, |
| forming an entity, certain documents have to be filed | | | | Wyoming passed the first state laws authorizing the |
| with the state in question. | | | | creation of these business entities. Mirrored after |
| States | | | | corporations, the filing process is similar to corporations, |
| To the surprise of some, state law instead of federal | | | | but with little tweaks here and there. |
| law governs business entities. When form an entity, | | | | Whereas corporations have articles of incorporation, |
| you should look to the Secretary of State for your | | | | limited liability companies have Articles of Organization. |
| jurisdiction to find out the filing requirements. Some | | | | These Articles of Organization require pretty much the |
| states provide clear and concise information. Other | | | | same information as articles of incorporation. The |
| states seem to enjoy making the process difficult and | | | | primary difference, however, is most states require |
| complex. Regardless, all of them have a web site for | | | | you to use a pre-printed form for the articles. Make |
| the Secretary of State. | | | | sure you check with your state to determine if this is a |
| Corporations | | | | requirement. |
| In most states, forming a corporation requires the filing | | | | Do It Yourself? |
| of articles of incorporation. Articles of incorporation | | | | If you are a sole proprietor seeking a business entity, |
| requirements differ by state, but typically require a | | | | you can handle it if you understand the concepts. If |
| statement of the name of the corporation, the number | | | | you don't understand the process, get a professional |
| of authorized shares, the name and address of a | | | | involved. |
| registered agent and the name of the incorporator. | | | | If there are two or more people in the business, an |
| The incorporator is typically the person signing the | | | | attorney should be used for liability purposes. These |
| articles of incorporation. Once created, the articles are | | | | liability purposes arise when one "owner" takes charge |
| filed with the Secretary of State, which eventually will | | | | of the filing. When disputes later arise, the take charge |
| approve and return them to you. In most states, there | | | | owner is inevitably accused of organizing the filing in |
| is no need to file bylaws, organization minutes or | | | | such a way at to create an advantage. |
| shareholder information. | | | | Yes, it happens all the time. |
| Limited Liability Companies | | | | |