How To Form Your Own Multi Member LLC in 2022


In this article, we layout what you need to file to make your very own Multi Member LLC.

Registering your own LLC is straightforward. Here’s what most states require to form a MMLLC:

  • Articles of Organization 
  • Registered Agent
  • Operation Agreement
  • EIN (Employer Identification Number)
  • Business Bank Account
  • Industry-Specific Licenses
  • Employee Regulations
  • Maintenance

Exact requirements vary from state to state.

You can find your state’s LLC requirements on your Secretary of State’s (SoS) website. They tell you how to acquire and submit the necessary documentation. Just make sure you’re looking at the requirements of the state where you plan on conducting business. 

Articles of Organization

You need to write out an Articles of Organization for your LLC and submit it to the Secretary of State where your LLC is operating. 

To figure out who this is and their office address, simply go to your state’s official government website. 

One part of your Articles of Organization involves coming up with a unique business name. A unique business name may extend to your county or to your state. It all depends on your state’s laws and regulations surrounding business names and trademarks. 

To find out if the name you want is already taken, you can conduct a free business name search using your SoS’s website. There are also plenty of third-party companies you can use to conduct a business name search. 

We recommend using your Secretary of State’s website first and then double checking using other resources just to make sure you’ve got your bases covered. 

In most states, you can submit your Articles of Organization online. If you’re unable to do it online you can submit copies of your documents by mail. Just make sure you send the copy and not the original. 

Registered Agent

As you describe the different positions within your company in your Articles of Organization be sure to include your Registered Agent. They are a vital component of your LLC.

Your business’s Registered Agent acts as the contact point between your LLC and the government. They send and receive important documents to/from the state. This being the case, your Registered Agent must have a mailing address in the state where your LLC is registered and operating. 

Your Registered Agent is either a fellow member of your LLC or they are hired from a third party. If you want to hire one, there are plenty of Registered Agent Service providers online to connect you to professional Registered Agents. 

Operation Agreement

In addition to submitting your Articles of Organization, you also need an Operation Agreement (OA). Your Operation Agreement is a detailed plan of action under normal circumstances as well as special situations. 

Some states don’t require OAs while others make them a necessity. Although it’s important to know your state’s specific registration requirements, you should still write one up anyways.

Not only is an Operation Agreement a guide for managing and operating your LLC. Your OA also acts as a safeguard against potential lawsuits stemming from within the LLC. Since it’s dealing with the management hierarchy and ownership, every member has to agree to the terms of this document. 

The Operation Agreement includes (but is not limited to):

  • Your Multi Member LLC’s name, 
  • Your LLC’s ‘headquarters’ address and any other operating locations,
  • Your LLC’s management structure (either member-managed or manager-managed),
  • The different positions within your business and the responsibilities of each position, 
  • How a member’s share of ownership is determined,
  • Every member’s portion of voting rights in the decision-making process,
  • How new members are accepted into your LLC and ownership gets reapportioned, 
  • Your LLC’s tax status,
  • How and when taxes are paid,
  • How and when members are paid,
  • What happens if a member leaves, 
  • How to resolve disagreements between members, 
  • How assets are divided if your LLC dissolves, 
  • A statement acknowledging that your OA meets your states requirements and laws, 
  • A statement acknowledging that your LLC is officially registered once all the required documents have been submitted to the state (plus dates when they were accepted),
  • The dates of establishment of your LLC,
  • How the OA can be amended or updated in the future,
  • An acknowledgment that all members have signed and agree to be bound by this contractual Operation Agreement as it is currently written,
  • Plus anything else your Secretary of State requires…

Compiling an Operation Agreement is highly encouraged because it allows all the members to understand how the LLC runs. There is no downside to having all the ins and outs of your business and the protocol of different potential events officially laid out and on file for all members to reference. 

While writing your Operation Agreement you should be careful using any online templates you may come across. Make sure the templates you use meet all the current requirements of YOUR state.

EIN

Think of an EIN as an ID number for your business. EIN stands for Employer Identification Number.

The name implies your business has employees, however, you need one regardless of whether or not your LLC has employees. Your EIN allows you to complete the registration process, pay taxes, and get special certifications and licenses for your business.

Obtaining an EIN is very easy and inexpensive. You can do it online, by mail, phone, or even fax (though we’re not quite sure why that’s even an option these days). 

You can submit an EIN application for free on the IRS website. Apply for your EIN Here Now!  

Once you’ve been approved by the state, you get your EIN

In a few states, you need some additional information to fill out the EIN form. HERE are links to every state’s government website. Just a fair warning though, these are government websites after all. Some of the links listed are old or broken. 

You can anyways use Google (or DuckDuckGo) to find your state’s current website. 

Business Bank Account

As you know, an LLC’s protections are only valid if the business’s finances are kept separate from the personal finances of all of the Owners. This means you have to open up a special Business Bank Account for your LLC. 

You can only do this after receiving your EIN. Just like you need a Social Security number or other ID to open a personal bank account, your business needs an EIN to open up a bank account.

Industry-Specific Licenses

You’ve got to be verified to begin selling the quality products and services you specialize in. 

You need the right permits, licenses, certifications, etc. to conduct business in your field. 

What you need depends on what you’re selling, what your local and state laws are, as well as any government regulation in your industry. For this reason, double-check with your secretary of state, city, and county commerce offices and get the necessary paperwork in order. 

Here are two huge reasons to be legally recognized in your industry. 

The first: Your business probably won’t be so successful if your potential customers are skeptical and lack trust. 

The second: You will be fined, imprisoned, and/or lose your business by breaking the law.

It’s simple. 

Take classes. Get trained. Gain experience. Follow (and surpass) your industry guidelines.

Employee Regulations

If your MMLLC has hired employees, you have to follow employer regulations. A few states (and even some cities) have unique rules and documents you must regularly submit to have employees working for your LLC. 

Even if your state doesn’t have employee regulations, there are still federal guidelines to follow and paperwork to submit. 

The process of preparing your business to accept employees is not complicated but it is a process nonetheless. A process you must go through to be recognized as an employer by the government.

Maintenance

Once you’ve got everything set up and running, you maintain the company. Maintenance involves staying up-to-date with paperwork and organizing your company records. 

Not only does this help the state keep an eye on you, but it also allows you to keep an eye on your business. By keeping clear records and tracking your business’s movements you can better understand what is working and what isn’t.

As the saying goes: “If it’s measurable, it’s manageable”