What is the most efficient way to form an LLC

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May 26, 2020

by a searcher from University of California, Los Angeles - UCLA Anderson School of Management in 230 Rose Ct, Campbell, CA 95008, USA

I have been looking to setup my LLC to manage operations for my fund (still raising). What are some of the ways others have set up their LLCs. Is legalzoom a necessary option or is the DIY approach good enough. Can a LLC be formed in Delaware since the fund is searching for companies nationally or does it have to be in your state or residence? These are some of my open questions. Would greatly appreciate if the community shared their perspectives on this particular item.

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commentor profile
Reply by a professional
from The Tulane University of New Orleans in Boston, MA, USA
DIY is cheapest, and if you are just one member, there really isn't a need for an operating agreement - who are you going to disagree with, yourself? Once you have multiple members, then you need an operating agreement to govern how the company's internal operations are managed/who has decisionmaking authority etc. Most off the shelf forms work fine, until you need to get into the weeds on one or two points, which is when you should talk to a lawyer.
When incorporating be careful your name isn't too easily confused with a big company that might be a competitor or who would view you are trying to siphon off business, customers or reputation.
Agree on the comment about Delaware plus your home state, why bother with the fees. Delaware is simply popular, but that's because the big companies use Delaware because of its robust caselaw which serves publicly traded and large cap entities best - not necessarily the smaller shops. And if you do go big, you'll be looking at new structures to deal with new issues anyway.
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Reply by a searcher
from The University of Chicago in Vancouver, BC, Canada
Hey Suman,

I can take a crack at answering your question. Lawyers can usually submit a LLC application for a nominal fee. Else, there are startups like Gust that can get your LLC setup in either Delaware or your home state within a 1-2 week period. The process is fairly straight forward and everything is done online. Gust also provides opportunity to have a registered agent so that all communications are sent to their address etc. The overall cost is generally around $400-$500 irrespective of what method you use.

Hope this helps! Also, great to see the Manipal background. I was in Manipal for 2 years- a wonderful experience!

Cheers,
Sid
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