If you’ve done your research about forming an LLC, you’ve probably encountered the concept of an “LLC kit.” Some sources insist that you need one. Many online formation services include a kit as part of their package.
But what is a kit, exactly? And does your LLC need one? With this brief guide, we’ll answer those questions and point you to where you can get one.
What it is:
A kit is a formality that many businesses choose. It is a decorative, embossed, and professional-looking binder that’s customized for your business. It is a striking method to store your business documents. Many kits include a seal, too.
What it includes:
Each kit includes an embossed binder and the LLC’s seal. The business’s important business documents go inside this binder: the Articles of Organization, the operating agreement, investment documents, financial records, and more. Each LLC includes a few different documents in its kit, depending on the business’s needs.
Do I need an LLC kit?
Technically, you don’t need a kit. You are legally required to maintain some business records, but you can do so with a simple file folder or an inexpensive binder. Using a formal kit is not required by law. You just need to have all your important documents in one place for easy reference. This is helpful if the LLC is audited or up for sale; your business documents serve as proof of your business’s value.
That said, a kit looks gives your business a polished, professional touch. It sends a good impression to potential investors, too. And the included seal embosses your official documents and correspondence. This formality can set you apart from other businesses.
Where can I get one?
You can either purchase an LLC kit or create your own. If you’d like to purchase one, online business formation services usually offer a kit. These services include Incfile, LegalZoom, Harbor Compliance, and more. These services do all the work for you, and they usually include sample forms. The seal they provide could also be difficult to create on your own.
Of course, the disadvantage of using a service is the additional cost. The service could also include components that you don’t really need for your business. If you use one, you should read the kit description carefully so you know exactly what you’re paying for. Most kits are fairly affordable, but budget-conscious businesses will need to factor in the additional expense.
If you’d rather create your own kit, all you really need is a binder that you’ll be able to recognize easily. It should be distinct from any other binder you use so it’s easy to pull out. You can usually purchase a professional one at your local stationery or office supply store. The advantage to creating your own is that you have more creative freedom. It could also be cheaper. That said, if you want an embossed binder or a seal, it may be more time-consuming to create it on your own.
Whether or not you use a formal LLC kit is up to you. As long as you have some way of storing your records, you’re all set.