LLC Formation in 7 Easy Steps

A Limited Liability Company (LLC) is a business structure that separates its owners from the business. This structure allows business owners to maintain control of the business while avoiding personal liability for business debts. To form an LLC, you need to file paperwork with the state where your business is located. The process of filing an LLC is simple. Every state has a different process for forming an LLC. However, no matter the state you are filing, there are seven general steps:

1. Create a Name

Every business needs a name, so your first step will be coming up with and submitting a name for yours. This name will appear on all your legal, financial, and other “official” documents. Just remember that aside from identifying your business and establishing a mood for your brand, you’ll be legally required to have a version of “LLC” included in your legal name.

2. File Tax Registrations

Once you have your name, you will need to file tax registrations. With the IRS, you will file Form SS-4 which provides you with your Employer Identification Number (EIN). Then you will file the required tax registrations with the state. 

3. Appoint a Registered Agent

Your company will receive official business, finance, and legal documents. The documents might be everything from business and tax forms to perhaps even subpoenas and legal notices. Only one person in a company is allowed to receive these documents, and that person is considered the “registered agent” for the company. You can hire an external registered agent or you can take on this role yourself, which means including your name and home address for official records. 

4. Get Your Articles of Organization Form

The Articles of Organization is a document that outlines the purpose, duties, and obligations of your LLC. In some states, the Articles of Organization are called the “Certificate of Organization” or the “Certificate of Formation.” In some states, it will also contain the management structure, registered agent information, and duration of operations. 

5. Write an Operating Agreement

The operating agreement is a “blueprint” for how the business works. It outlines the financial structure, payment to partners, and other operational aspects to the state government. For people going into business by themselves as a single-member LLC, the process is simpler and you may decide to write it yourself using a basic template. For bigger companies with multiple partners, using an attorney is a better course of action.

6. Apply for Relevant Licenses

Depending on your industry and state, you may need licenses for operation. Contact the Secretary of State to learn what licenses your business needs.

7. Fill Out & Submit the Forms

Once you’ve filled out your forms, double-check them to ensure everything is correct. Then submit them and pay an administrative fee. Once the documents are approved, you’ll get a state certificate showing your business is registered to operate legally.

Remain in Good Standing

Once everything is done, it’s up to you to keep your LLC active and in good standing. Stay compliant with any regulations that apply to your business whether state tax regulations, health and safety ordinances, or keeping valid licenses and permits.

Just remember to research the specific LLC formation requirements for your business and your state.