Starting your own business is an exciting endeavor, and one of the first decisions you’ll need to make is choosing the right business structure. One popular option for many small businesses is the Limited Liability Company (LLC). An LLC combines the benefits of a sole proprietorship/partnership with the liability protection of a corporation. In this guide, we’ll walk you through the step-by-step process of starting your own LLC.
Step 1: Choose a Name for Your LLC
The first step in creating an LLC is selecting a name for your business. Make sure the name is unique and doesn’t conflict with existing businesses in your state. Most states require that the name includes “Limited Liability Company” or its abbreviation (“LLC” or “L.L.C.”).
Step 2: Choose a Registered Agent
A registered agent is a person or entity responsible for receiving legal documents on behalf of your LLC. This can be you, a partner, or a third-party service. The registered agent must have a physical address in the state where your LLC is registered. Our starter, professional, and premium packages all come with a year free of registered agent service!
Step 3: File Articles of Organization
To formally establish your LLC, you’ll need to file the Articles of Organization with your state’s Secretary of State office. This document outlines basic information about your business, such as its name, address, and management structure.
Many states provide pre-made forms that you can fill out and submit online or by mail. All of our packages include the creation and filing of this document for you.
Step 4: Create an Operating Agreement
Although not always required, it’s advisable to create an operating agreement for your LLC. This document outlines the ownership structure, management responsibilities, and operating procedures of the company. It can be especially useful in preventing disputes among members in the future.
An editable operating agreement is included with our Professional and Premium packages and can be added on to our Starter package.
Step 5: Obtain an EIN
An Employer Identification Number (EIN), also known as a Federal Tax Identification Number, is needed for tax purposes. It’s like a Social Security number for your business and is used to open business bank accounts and file taxes.
You can apply for an EIN number with the IRS here.
An EIN number is included in our professional package or can be added on to any other package you choose.
Step 6: File Necessary State Filings
Depending on your business’s location and industry, you might need to obtain additional licenses or permits to operate legally. Research your state and local requirements and ensure you have all the necessary documentation.
Step 7: Open a Business Bank Account
Keep your business finances separate from your personal finances by opening a dedicated business bank account. This makes record-keeping and accounting much easier and demonstrates the separation between your personal assets and those of the business.
Step 8: Comply with Ongoing Requirements
After starting your LLC, there are ongoing requirements to maintain its status. This may include filing an annual report, paying state fees, and renewing licenses or permits. Make sure to stay informed about these obligations to avoid any potential issues.
Starting an LLC is a significant step towards building your own business and achieving your entrepreneurial dreams. If you’re ready to start an LLC, our professionals at IncEasy can help you today! Take a look at our package options here to get started. If you have any questions, feel free to give us a call at 866-506-3279.
*IncEasy does not offer legal, tax or accounting advice. This is for informational purposes only. Please consult your own legal, tax and accounting professionals with any questions.