This article was co-authored by Clinton M. Sandvick, JD, PhD. Clinton M. Sandvick worked as a civil litigator in California for over 7 years. He received his JD from the University of Wisconsin-Madison in 1998 and his PhD in American History from the University of Oregon in 2013.
There are 12 references cited in this article, which can be found at the bottom of the page.
This article has been viewed 25,038 times.
"Limited Liability Company," or LLC, is a way of officially organizing your business and registering it with the government. There are different processes to form an LLC in various states. If you're in Oklahoma, follow these steps to form an LLC, which will enable you to transact business within the state.
Steps
Understanding LLCs
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Know the purpose of an LLC. Every business must be legally registered with the state it operates in for taxation purposes. A limited liability company allows for a simple taxation process but also helps protect your personal assets in the event of a lawsuit or bankruptcy.
- If you own an LLC, you report your business earnings or losses annually on your personal income tax return. This means your company does not have to file taxes separately.[1]
- The "limited liability" aspect of an LLC means that even though you personally file taxes on the company, you are not personally liable if your company ends up in a lawsuit or owing money. In that situation, only the assets of the business are at risk, instead of your personal assets.[2]
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Decide if an LLC is right for you. There are several business structures to choose from (in the state of Oklahoma, these include a sole proprietorship, general partnership, limited partnership, limited liability partnership, and corporation[3] ), but the LLC is a good choice for the majority of small businesses. An LLC might be right for you if:
- You are concerned about personal liability for potential lawsuits or debts that might result from a business venture.[4]
- You are not forming a bank or insurance company. In Oklahoma, LLCs are permitted to engage in any lawful business except banking and insurance.[5]
- You are forming a company on your own and/or you do not plan to have investors or shareholders. In every state, many business structures require more than one person to officially register with the state; but you can form an LLC with just one person, and you can own and manage it on your own. However, LLCS don't have the flexibility of a corporation, so you cannot add investors or shareholders later on.[6]
- You are ethical and responsible. If you act illegally or irresponsibly, you can lose the protection of an LLC, and in that situation your personal assets might be at risk. A judge can decide to bypass the limited liability clause if he or she feels you intentionally caused a bad situation with your company.[7]
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Be sure you meet the requirements to apply for an LLC. In the state of Oklahoma, these requirements are few:
- You must be 18.
- You must be a resident of Oklahoma or, if you are a domestic or foreign LLC registering specifically to do business in Oklahoma, you must maintain a business office with a street address (not a post office box).[8]
- You must have $100 to pay a filing fee, plus a 4% service charge if you use a credit card.[9]
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Applying for an LLC in Oklahoma
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Choose your LLC name. Before you can register an LLC with the state, you need a company name. There are several important things to keep in mind when choosing your name:
- The name must be original. You cannot choose the name of an existing, registered Oklahoma LLC or the name of any corporation (in or out of the state) that has been used for the last three years. To check if the name you want to use is available, call the Oklahoma Secretary of State at (405) 522-2520 or visit www.sos.ok.gov.[10]
- The name must indicate that it is an LLC. In Oklahoma, you can just tack the letters LLC, LC, L.L.C., or L.C. onto the end of whatever you want to name your company, or you can use the words "Limited Company" or "Limited Liability Company" in the title itself. You can also abbreviate the word "limited" as "Ltd." and/or the word "company" as "Co."[11] For example, if you want your company to be called "White Paper," you could officially name it "White Paper LLC," "White Paper Ltd. Co.," "White Paper L.C.," "White Paper Limited Company," "White Paper Limited Co.," etc.
- It must not contain words restricted by the state of Oklahoma. You cannot use the words "bank," "insurance," or any derivative that suggests your company is a bank or insurance company. You can also not use terms that might confuse your company with federal or state agencies (for instance, you cannot call it "FBI"). If you are in doubt about whether your name is acceptable, be sure to contact the Secretary of State's office for advice before registering.[12]
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Download the Oklahoma Articles of Organization. This form is conveniently located on the Oklahoma Secretary of State website at https://www.sos.ok.gov/forms/fm0074.pdf. Print out the form. Use blue or black ink to completely fill in the required information on page 3, including:
- Complete name of the LLC, including the letters or words to indicate it is a limited liability company.
- Street address of the business office. Your home address is acceptable if you are an Oklahoma resident and you do not maintain an office outside the home.
- A working e-mail address for the primary contact.
- Name and street address for the registered agent. This can be the same as the business office address.
- Term of existence. This refers to how long you want the registration of the company to last. If you have no plans to dissolve or end the company at a specific time, write "perpetual." Otherwise, you can indicate a set number of years (for example, by writing "5 years") or a specific expiration date (for example, by writing "Expires 1-1-2020") .
- Signature, printed name, and date.
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Register your paperwork with the state. You can do this in person or you can mail or fax your forms. You must pay a filing fee of $100. Make check, cashier's check, or money order payable to "Oklahoma Secretary of State."[13]
- Send or deliver in person your filing fee and completed articles of organization to: OKLAHOMA SECRETARY OF STATE, 2300 N Lincoln Blvd. Room 101, State Capitol Building, Oklahoma City, Oklahoma 73105-4897.
- To fax your forms, include a cover letter with your credit card number, expiration date, name on the card, a return address, and the amount you authorize the Secretary of State's office to charge your card. Be sure to include a 4% service charge for the use of a credit card ($104 total). Don't forget to include the articles of organization after the cover sheet! The Secretary of State's fax number is (405) 521-3771.[14]
- You can also complete the registration online at https://www.sos.ok.gov/cart/contact.aspx?ReturnUrl=/cart/work.aspx?f=369
- After you file your articles of organization and fee to the Oklahoma Secretary of State, it will take about 10 to 15 business to receive your business permit in the mail at the address you indicated on your forms.
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Maintaining Your LLC
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Create an operating agreement. You do not have to file this document, and it is not a legal requirement to have one, but creating one is a smart move legally, especially if you will have co-owners or employees.
- An operating agreement specifies the ownership and operating procedures of the company, including such information as percentages of ownership.[15]
- If you have a complex business arrangement including co-owners and/or multi-members, it's a good idea to have the operating agreement drafted by a lawyer who specializes in business law. This will ensure that the operating agreement is legally sound and that all parties are aware of its provisions. However, you can draft it yourself if you are forming an LLC completely on your own (since you are unlikely to sue yourself!).[16]
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Obtain other licenses or permits. After you've filed for an LLC with the state, you are not necessarily free to begin business operations. You still have to obtain any requisite licenses, permits, or other filings that pertain to your specific business or industry.[17]
- For example, in Oklahoma, you need one or more licenses or permits if you work in construction, retail, restaurants or bars, wholesale, credit services, transportation, or some other industries. There are many types of permits required in Oklahoma.[18]
- If you're not sure if your industry requires licenses or permits, call the Oklahoma State Department of Commerce Business Customer Services line at (405) 815-5345.
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Prepare for taxes. One of the benefits of an LLC is that it is not viewed by the government as a separate entity, so it is not taxed as one. You still have to prepare to pay taxes on your business earnings.
- If your company will have employees, you need to register for a federal tax identification number (EIN). There are many websites that charge a fee to file your paperwork for you to receive an EIN, but the IRS provides these free if you file yourself.
- If you will have employees and/or if you are selling a product, you will need to register to file state sales tax. There is a $20 fee to register for business sales tax in Oklahoma, and you must renew your permit every three years.[19]
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File an annual report. In Oklahoma, you have to file an annual certificate and pay a filing fee of $25.
- The report is due on the anniversary date of your company's incorporation.[20]
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Expert Q&A
Video
References
- ↑ http://www.nolo.com/legal-encyclopedia/limited-liability-company-llc-faq-29144.html
- ↑ http://www.nolo.com/legal-encyclopedia/limited-liability-company-llc-faq-29144.html
- ↑ https://www.sos.ok.gov/corp/organization.aspx
- ↑ http://www.nolo.com/legal-encyclopedia/limited-liability-company-llc-faq-29144-3.html
- ↑ https://www.sos.ok.gov/corp/organization.aspx
- ↑ http://www.nolo.com/legal-encyclopedia/corporations-vs-llcs-29025.html
- ↑ http://www.nolo.com/legal-encyclopedia/limited-liability-company-llc-faq-29144.html
- ↑ https://www.sos.ok.gov/forms/fm0074.pdf
- ↑ https://www.sos.ok.gov/forms/fm0074.pdf
- ↑ https://www.sos.ok.gov/forms/fm0074.pdf
- ↑ https://www.sos.ok.gov/forms/fm0074.pdf
- ↑ https://www.sos.ok.gov/corp/organization.aspx
- ↑ https://www.sos.ok.gov/forms/fm0074.pdf
- ↑ https://www.sos.ok.gov/feedback/contact.aspx
- ↑ http://howtostartanllc.com/oklahoma-llc
- ↑ http://howtostartanllc.com/oklahoma-llc
- ↑ http://okcommerce.gov/in-state-business-resources/business-licensing-operating-requirements/
- ↑ http://okcommerce.gov/in-state-business-resources/business-licensing-operating-requirements/
- ↑ http://www.ok.gov/tax/Businesses/Tax_Types/Business_Sales_Tax/
- ↑ http://www.bizfilings.com/oklahoma/ongoing-llc-requirements.aspx
Reader Success Stories
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"This article is excellent because it provides step by step directions. I will definitely use this as a guide when I start my business. This article is such an easy read and easy to understand."..." more