Limited Liability Company (LLC) Guide
Oklahoma Limited Liability Company (LLC) Guide
Oklahoma is a great place to conduct business. And the most popular form of business entity for most companies today is the limited liability company, or LLC. This is a general guide for the ins-and-outs of LLCs. We discuss how to form an LLC in Oklahoma, how to get your LLC started in Oklahoma, how to operate an LLC in Oklahoma, and more.
Contact Avenue Legal Group for any questions about Oklahoma LLCs, or flat fee quotes on LLC formations and document drafting.
Do I need an LLC?
The default form of conducting business in Oklahoma is a sole proprietorship, which does not confer any tax or legal advantages. An LLC provides a form of legal liability protection which can prevent the owners of the LLC, called members, from being personally liable for the LLC’s debts and obligations. For the minimal cost of creating an LLC, members gain significant protection as Oklahoma LLC law offers strong support for business owners.
What Types of Businesses Can Be an LLC in Oklahoma?
Oklahoma rules allow any type of lawful business, purpose, or activity to be operated as a limited liability company except for domestic insurers. The business does not have to be conducted for profit. Many of our clients use LLCs to buy and hold real estate, enter a joint venture with another company or individual, operate a services business, operate a retail business, and more.
How to Form an LLC in Oklahoma
Forming an Oklahoma LLC requires filings with the Oklahoma Secretary of State and the payment of an application fee. All Avenue Legal Group entity formation flat fees include the preparation of all necessary filings and our quoted pricing always includes the state-mandated fees. The required forms may be completed online or in person with the Secretary of State; alternatively, you can contact our firm and we can often apply to form your LLC on the same day you provide us the necessary business details.
Form an Oklahoma LLC Online
The Oklahoma Secretary of State has an online portal which allows online LLC filings. However, you may miss crucial steps and elections if applying without assistance. For example, we have had clients come to us after attempting to form an LLC online through online legal services platforms where the platform did not actually check the single most essential box for forming an LLC online: the “limited liability of members” box. Contact us for help or guidance forming your Oklahoma LLC online.
How to Start an LLC in Oklahoma
Before starting business operations as an LLC in Oklahoma, the legal entity should be formed with the Secretary of State (above). After the entity is formed and the Secretary of State has issued a Certificate of LLC and Articles of Organization, business owners can start conducting business immediately. However, we recommend a few more steps below before members jump into agreements and operations.
What Documents are Required for an LLC in Oklahoma
Oklahoma LLCs require a few documents to officially be formed and acknowledged as shielding the owner from legal liability in operations; this includes articles of organization and a certificate of LLC.
It is also strongly encouraged that LLC members have an LLC operating agreement (sometimes known as a partnership agreement), business banking accounts which are separate from the members’ personal accounts, an employer identification number (EIN) or taxpayer identification number (TIN) which is assigned by the IRS, and the specific documents which are unique to the type of business being conducted by the LLC.
Additional documents could include joint venture agreements, client service agreements, photo or video releases, etc.
How to Operate an LLC in Oklahoma
After your LLC is formed, you’ll need to know how to operate the entity as a company that is separate and distinct from the owners/members. This requires separate financial accounts and accounting, use of the LLC (instead of an individual person’s name) as a party to contracts involving the company, and all other standard business best practices. Avenue Legal Group can help teach your team to properly operate an LLC, so contact us if you have any questions about Oklahoma LLC rules.
What is “Piercing the Corporate Veil” and Does it Apply to Oklahoma LLCs?
A legal theory called “the corporate veil” is afforded to all Oklahoma LLCs; this means your legal entity is treated as though it is separate and distinct from the owners/members of the entity itself. “Piercing the corporate veil” is a legal claim or argument which allows opposing parties to challenge the separate and distinct nature of an entity.
If your LLC ends up in litigation, you may be subject to another litigating party’s attempt to “pierce” your LLC’s status, possibly with the long-term goal of making the owners/members of the LLC personally liable for the LLC’s debts, obligations, actions, inactions, failures, trespasses, torts, etc.
Two of the most common arguments for piercing the corporate veil of Oklahoma LLCs are (1) the members are commingling (or mixing) funds of the company with their personal finances (“commingling”), and (2) the members are directly paying personal debts with company funds (often called “alter ego”).
How to Best Protect an Oklahoma LLC
A few steps can be taken to protect LLC members in Oklahoma:
- Operating Agreement or Membership Agreement: All LLCs should have a written operating agreement which outlines the roles of each member, the membership or ownership percentages of each member, and provide crucial language related to how members may enter or exit the business.
- Business Bank Accounts: All LLCs should have bank accounts which are separate from the personal accounts of the members.
- Business Decisions: All LLCs should carefully document all official LLC votes, decisions, and actions.
- Have a Trusted Business Attorney: We also strongly recommend having an attorney as part of your LLC team – not necessarily in the ownership group, but at least someone you can call when you have a question about the business’ operations or how to resolve a conflict between members. We regularly serve as outside counsel and general counsel for LLCs.
LLC Structures in Oklahoma – Series LLC and Joint Ventures
Many clients ask about series LLCs in Oklahoma; Oklahoma law allows very broad discretion in how to structure single LLCs, but it also allows for multiple LLCs to be used in conjunction, even by the same individuals. Accordingly, Oklahoma law allows multiple LLCs or businesses to partner together in joint ventures, which usually see a new LLC formed to provide legal protection to the venturers.
Oklahoma Business Attorneys
Contact Avenue Legal Group to discuss your Oklahoma LLC.
Looking for a local counsel? Avenue Legal Group regularly serves as local counsel to firms, individuals, trustees, and other stakeholders from outside of Oklahoma.
Have Questions?Contact Us