Forming an LLC in Oklahoma
If you've been thinking about forming your own LLC (limited liability company) in the state of Oklahoma, you're probably wondering what steps you'll need to take and how much it will cost. Even if you're already aware of the benefits of forming this type of business entity, it's a good idea to do your research and make sure that starting an Oklahoma LLC is the right move for you.
Forming an Oklahoma LLC is not difficult, but there are several steps that you need to take. There are also obligations that you'll need to keep up with even after LLC formation.
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Benefits To Forming an LLC in Oklahoma
An LLC or "limited liability company" combines elements of both corporations and partnerships. An LLC has "flow-through" taxation the same way that a partnership does. Still, it also offers owners protection against personal liability for the company's debts and judgments similar to that of a corporation. Without this personal liability protection, you could lose your personal assets in a lawsuit against your company.
Steps To Forming an LLC in Oklahoma
Step 1: Name Your LLC
You'll have to come up with a name for your LLC that represents your products and services but also complies with the state LLC laws. Note that, under the laws of Oklahoma, your LLC name must be distinguishable from all other business names on record with the Secretary of State. This means your name can't be too similar to a name someone else has already registered or reserved in Oklahoma. How would you know that a name isn't available? You have to check the Oklahoma Business Name Database for name availability. If a name you like isn't available, you need to choose a different name for your LLC.
Also, note that your LLC name must include one of the following terms, phrases, or abbreviations:
- Limited Liability Company
- Limited Company
Step 2: Get a Registered Agent
You'll need to get an Oklahoma registered agent to handle service of process. You could be your own registered agent, but many entrepreneurs find it's better to appoint another person or a company authorized to do business in Oklahoma. You could use a registered agent service if you're more comfortable with that. Just make sure that your LLC registered agent is available during normal business hours and has a physical street address (not a P.O. Box).
Step 3: File Your LLC Articles of Organization
Filing Articles of Organization is one of the most important steps because it actually forms your LLC. Oklahoma Articles of Organization must include the following:
- Name and address of the limited liability company
- Name and address of the registered agent for the limited liability company
- Term of existence of the limited liability company
Step 4: Draft an Operating Agreement for Your LLC
LLC operating agreements aren't required by law in Oklahoma. However, it's useful to have one because it establishes how your organization will be governed.
LLC operating agreements tend to address: rights and responsibilities of the members, admission of new members, ownership, liabilities, and the distribution of profits and losses. Make sure that you keep this document in a safe place so that you can refer to it in case of a dispute or conflict within the organization.
Step 5: Get Your EIN
An EIN (Employer Identification Number) is a number that the IRS (Internal Revenue Service) distributes to business entities for identification purposes. It's similar to a social security number.
You'll need an EIN or Tax ID number to hire employees for your small business or open a business bank account. Don't worry—it's easy and free to apply for your EIN online.
Step 6: Get a Business Bank Account
You'll need to open a business bank account and get a business credit card as soon as you can. It's important because you must keep your business and personal funds separate to maintain your personal liability protection. Be prepared to provide your EIN and formation documents when you open your business bank account.
Frequently Asked Questions (FAQs) About Forming a Limited Liability Company in Oklahoma
1. How much does it cost to form an LLC in Oklahoma?
It costs $100 to file the Articles of Organization. You'll also need to file an annual report (also called an annual certificate) at the cost of $25. Factor in an additional $10 if you reserve your business name before registering your LLC.
2. Do I need to get business licenses or permits also?
You may need to get a business license or permit to operate your business. It depends on the type of business you have and the location of that business. Contact local and state agencies to find out what you might need for your particular type of business.
3. How do I handle business taxes for my LLC?
For your federal taxes, you may be able to select how the federal government taxes the LLC. For state taxes, you'll need to check with the Oklahoma Tax Commission about state requirements.
Note: State laws are always subject to change through new legislation, rulings in the higher courts (including federal decisions), ballot initiatives, and other means. While we strive to provide the most current information available, please consult an attorney or conduct your own legal research to verify the state law(s) you are researching.
Want Help Forming an LLC in Oklahoma
Fortunately, forming an LLC can be a straightforward process with FindLaw’s Business Formation Service. If you have questions, discuss your situation with an experienced business organization lawyer near you to get the help you need in forming or managing your business in the state.
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