While you or your CPA can form an LLC online, many business owners overlook important legal details like management structure and properly drafted operating agreements. Generic documents from the internet often don’t follow Missouri law and can lead to confusion, disputes, or even lawsuits. Working with an experienced attorney ensures your LLC is set up correctly and positioned for long-term success, including meeting requirements for things like business loans.
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Assertion Law Firm LLC gives business owners the legal tools and knowledge to start their LLC the right way. Let our skilled attorneys guide you through each step of the formation process.
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Don’t risk setting up your business the wrong way. Professional legal advice from our attorneys and proper written documentation can help prevent future issues. The right legal foundation protects your interests, ensures compliance with state laws, and gives your business the best chance at long-term success.
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Why You Need an LLC?
Have you ever wondered… why do I need an LLC for my business? Don’t worry, we are here to help. An LLC stands for “Limited Liability Company”. An LLC is mainly setup to protect the members’ personal assets and keep them separate from the business’s creditors. These are some additional reasons for forming an LLC:
You may have started your small business under your own individual name and filed a fictitious name registration (also known as DBA or doing business as) for your business name with the Missouri Secretary of State’s office. This has not technically formed a separate business entity. A DBA does not distinguish between your business assets and personal assets.
Simply put, if you are sued in the course of your operations, you stand to lose your personal as well as your business assets as a sole proprietor or DBA.
Missouri LLCs can be formed with more than one owner and have the operational flexibility of a partnership or corporation. If this option is chosen, I can’t stress enough the importance of consulting an attorney to draw up an operating agreement to determine the ownership, voting structure, and basics of operation. Additionally, a buy-sell agreement can be prepared setting out what would happen upon the disability or withdrawal of an owner. Few people go into business expecting things to go awry.
It is good business practice to have strong legal agreements in place between business owners from the beginning.
LLCs in Missouri are similar to corporations in that they offer certain liability protections to the owners by separating business from personal assets. However, LLCs have fewer corporate formalities and greater tax flexibility. This is one of the key reasons that we advise clients to consider forming a Missouri LLC at the initial stages of starting their new business.
You shouldn’t wait until you are a certain size, have a certain amount of revenue, or begin hiring employees. Don’t think you are too small to take this important step.
The most popular feature of a Missouri LLC is that your personal assets are separate from your business liabilities. With an LLC in place, a lawsuit against your business may still be able to clean out your business assets but likely won’t cost you your family home.
For example, you might have to sell your business equipment, office space, and computer equipment to fulfill a debt that, for whatever reason, you couldn’t pay. Once the business assets are sold, if there is any more outstanding debt, the creditor or investor won’t be able to liquidate your personal home or vehicle to satisfy the debt.
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What is an LLC Operating Agreement?
The LLC Operating Agreement is an internal document outlining how the business operates. Once an LLC is created by filing the Articles of Organization with the Secretary of State, your LLC Operating Agreement should be created. It isn’t filed with the Secretary of State or any other government agency. However, each business entity must create and maintain this important document themselves to prove ownership interests and management structure.
Creating a thorough Operating Agreement is the step that is most often overlooked. Often, many commonly omitted details can be avoided when you go through the process of forming your LLC with an attorney.
Frequently Asked Questions About LLCs
Is an Operating Agreement required?
Yes. It is required for an LLC in Missouri to have an operating agreement as set out in RSMO Section 347.081.1. An operating agreement protects your business interests and clarifies ownership and operational guidelines.
Are all LLCs taxed the same?
No. LLCs provide a lot of flexibility and allow owners to choose between various tax classifications, including partnerships, sole proprietorships, and S corporations.
Do LLCs require annual filings?
No. Missouri LLCs require fewer formalities than corporations, they do not require an annual filing or formal annual meetings like with a corporation.
Are LLCs only used by small businesses?
No. You might assume that LLCs suit only small businesses, but large companies and enterprises frequently choose the LLC structure. The reason why large companies may go with an LLC is that the structure offers flexibility in how the company is managed and taxed.
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