Formation, Registered Agents and Annual Maintenance

Scope of the chapter. An LLC comes into existence by a public filing and remains in existence, in good standing, only while it meets a short list of continuing obligations to the state of formation. This chapter examines those requirements. It describes the certificate of formation and the moment at which an LLC is formed, the rules on names, the registered office and registered agent, the treatment of acts taken before formation or under a defective filing, the information the public record provides and the statements of authority some statutes permit, the annual reports, taxes and fees that keep an LLC in good standing, the consequences of default, including cancellation, administrative dissolution and revival, and the federal reporting and tax steps that accompany formation. It closes with a checklist for formation and annual maintenance.

Why formation matters. Formation is often treated as a clerical step, and in most cases it is one. The consequences of an error can nonetheless be serious. A person who signs a contract for an LLC that has not yet been formed may be personally liable on it. An LLC whose certificate has been cancelled for nonpayment of tax may find that its acts during the period of cancellation are open to challenge until it is revived. An LLC that loses its registered agent may be served through the Secretary of State without actual notice of the suit, and may suffer a default judgment. A member who relies on the statutory shield is relying on a filing that must be made correctly and kept current. The matters in this chapter are therefore part of the foundation of the liability shield examined infra ch. 25.

Relation to other chapters. The choice of the formation state is examined infra ch. 5, and the survey of state statutes supra ch. 2. Registration of an LLC to do business in states other than its state of formation is examined infra ch. 12. The operating agreement, which the statutes permit to be made before, at or after formation, is examined infra chs. 7 and 8. Federal tax classification is introduced supra ch. 1 and examined in detail in Part VIII. This chapter uses the Delaware act and the uniform act as its principal reference statutes and notes the practice of other states where it differs materially.

Organization. The chapter proceeds in nine parts:

1. the certificate of formation and the moment of formation (¶ 610);
2. names (¶ 620);
3. the registered office and registered agent (¶ 630);
4. pre-formation acts and defective formation (¶ 640);
5. the public record and statements of authority (¶ 650);
6. annual reports, taxes and fees (¶ 660);
7. good standing, cancellation, administrative dissolution and revival (¶ 670);
8. beneficial ownership reporting and federal tax steps at formation (¶ 680); and
9. a checklist for formation and maintenance (¶ 690).