Starting a business is often a very slow process. From brainstorming to getting funding, there will be many steps that you have to take to turn your business concept in to a profitable company.
Some people keep things informal during the early stages of planning and even early operations. They may know they want to file the paperwork to become a limited liability company (LLC), but it is easy to keep putting off that crucial step. How do you know it is time to file your LLC paperwork?
You are ready to go to a bank for financial support
If your company is not yet operational, getting a line of credit from the bank or other outside investments is often the last step necessary to make your great idea an actual company.
Before you go to a meeting with a financial institution or prospective investors, actually creating the business is a critical step. That way, you can show that you would have made the financial and temporal investments necessary to begin making the business into a thriving organization.
You are ready to provide services, produce goods or hire employees
Maybe you plan to run the company completely on your own without any workers. As soon as you expect to take out a client or manufacture a product, you will want the protection offered by an LLC. The same is true if you are about to hire your first real employees.
The primary benefit of an LLC is protection for you as the person who owns and operates the business. If you wait too long to file your LLC paperwork, the delay could limit your protection for liability if clients, customers or employees bring a claim against your business.
Forming an LLC is something you only want to do once and correctly. Getting help from an experienced attorney with this process, even if there are DIY forms available online, will help you maximize the protection you receive.