How to Start an LLC (Limited Liability Company)

An LLC (Limited Liability Company) gives you the legal protection afforded to a corporation with the tax benefits of a partnership or sole proprietorship. If you want some of the benefits that a corporation provides, but don’t want to deal with the added expense or set up a corporation, you may prefer an LLC. If you’re a startup, choosing an LLC entity structure will help keep your business separate from your personal assets.

If you’re looking for a legal entity for your business, an LLC is a better option than a corporation. Let’s not forget the importance of these multiple tax breaks, how easy it is to handle our finances, and how much less reporting we have to do. Once you’ve determined which states to start an LLC in, there are specific steps to follow to get your LLC up and running.

Easy Part of LLC

Starting an LLC isn’t too difficult. It can be a little boring since it is a filling out of forms and information that isn’t brain surgery. However, you have a chance to create a company that could earn millions. It is the easy part because you don’t have to do much. Instead, you just need to know what to buy and where to get it from and fill out some legal documents.

LLCs are especially useful for small businesses and startups, but they may lack some protection against certain liabilities. IncFile and ZenBusiness are websites that help a growing business stay organized and focused on selling. Not only do these companies do everything from providing you with incorporation plans and serving as your consultant, they even offer lifetime customer care and more!

While creating a business entity requires an investment of time and money, it’s easy to establish and maintain an LLC compared to other legal entities. That means you can avoid dealing with the legal constraints that come with incorporating.

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Problematic Portion of LLC

Starting a business can be scary, but as long as you have a great idea and some passion behind it, you’ll be fine. There is a lot to consider including where you should open, how you should set up your company, finding financing, and what the right resources to use might be. When starting an LLC, it can be hard to figure out what information goes together and where to find it.

The process of forming an LLC depends on the state you choose, and this means that there can be state-to-state variations in rules and regulations. Choosing the wrong state can complicate matters and cost you time, money, and effort.

There are a lot of things to consider when choosing a company name, but for business owners, the most important aspect is that it isn’t already in use. Something to consider when choosing a business name is that the name you want may already be taken by another business or LLC. It is possible and maybe necessary, to come up with a different name. Another thing to think about is that every state has guidelines for choosing.

There is a process for forming an LLC, and you need to go through those steps successfully to reach your goal of owning an LLC:

Step 1: Pick Your Leading State

If you want to create an LLC, you’re going to have to form it in a particular state. Before making this decision, learn about its rules and regulations. You should register as a foreign LLC with the appropriate state authorities so that your company can exist legally in those states. If you’re thinking about hiring a lawyer in the state where you intend to operate, it may also be helpful to consider if they have experience with start-ups.

However, make sure that you investigate how much the extra fees are and whether it’s worth it if you’re thinking of refinancing. If you plan to file for an LLC, you must conduct your research into the business laws of the state where you want to register.

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Step 2: Decide a Title for Your LLC

While naming your company may seem easy, it’s surprisingly tough. You must pick a name that will not be confused with any of your competitors, and at the same time, it should be appealing to your target market.

State Guidelines

  • Your business name must contain the term “limited liability company” or its abbreviation if your state requires that.
  • The name of your new LLC can’t be the same as or too similar to the name of a government agency, law enforcement agency, or other business.
  • The SEC limits the use of certain words in advertising, such as “bank”, and requires additional documentation if you’re going to use these words in your ad, to be part of your LLC.

Click here to read: 5 Tips For Choosing The Best Domain Name For Your Startup

Your legal name is not a secret and you should always have it listed on your official documents. Also, it’s frequently used as a brand name for marketing purposes, but your customers will recognize your brand name. For example, the full legal name of Hewlett-Packard is Hewlett-Packard Company. However, they have chosen to use the abbreviation HP as a brand name instead of the full name. If you’re founding a new business, it’s probably worth filing a DBA form with your local government.

Look Over Name Accessible

When you run a name search, there are two ways to evaluate whether a name is available: state-level and federal-level. Search your state’s business name database for existing businesses with the same name as the one you want to use. Next, check whether that name is available as a domain name and/or social media channel.

Even if you don’t want to create a website or a social presence, this still matters. Choosing a relevant domain name is a vital step in creating good content. Being the real you. Isn’t that more valuable than choosing an irrelevant domain?

You can perform a trademark search on the U.S. Patent and Trademark Office website to verify if someone else has already registered your business name.

Reserve Company Name

If you’re going to be applying for an LLC, but don’t plan on doing it right away, then you may want to register the name as a domain name. In most states, you can reserve a name for your startup by filing the appropriate form and paying your fee.

The period during which you can change the terms of your reservation varies from state to state. The renewal policies vary, too.

Step 3: Sort out Paperwork

Incorporating a limited liability corporation involves filing paperwork, some of which can be tedious. But you must persist until all documents are in order and you’ve filed them properly.

Select a Registered Agent

In almost every state, the registration for an LLC requires that it name a registered agent. The registered agents are people or companies who have been appointed by the LLC to be its official representatives. The registered agents are people or companies who have been appointed by the LLC to be its official representatives. This person can also serve as an officer of the company.

In a lot of states, persons who are over 18, and who have a residential address in the state, can become registered agents. An LLC that doesn’t file paperwork is just as legal, but without these papers, you may not be able to get the benefits of being an official company. While it’s possible to find free registered agent services on the internet, you should be aware that there are companies that will provide this service for a fee.

Organize LLC Report

To create an LLC, you must fill out the articles of the organization. This may be referred to as a “Secretary of State”, or some other similar name. Other states (including Mississippi, New Hampshire, Delaware, Washington, and New Jersey) use the term “certificate of organization”, “certificate of incorporation”, or “articles of incorporation” instead of “certificate of formation”. Pennsylvania and Massachusetts also use the term “certificate of organization” to describe this type of document.

If you file your papers directly with the Secretary of State, then your paperwork will be cheaper. If you want a cheaper LLC filing service, then consider using one that specializes in the state you are forming an LLC in. If you’re not sure how to deal with the paperwork, or if you’re not comfortable dealing with it, then you can always hire an attorney.

Create a Formal Operating Agreement for Your LLC

An LLC operating agreement helps define the rules of how a company will be run, including important issues such as how profits and losses will be distributed. The operating agreement dictates the responsibility of the members, how profit will be distributed, how to hold meetings, and the process for dissolving if the company is disbanded.

An operating agreement is a document that describes the shared ownership of a business and how it functions. It may not be required by your state, but it is an effective way to protect yourself from legal liability and minimize future disagreements among shareholders.

Operating agreement main components:


This section of your business plan should include an overview and outline of your company. Your business’s legal documentation should include all the relevant information. If you plan to add more members later, include that information too.

  • Supervision and Voting

This component describes how the managers of the company will be selected, lets you specify how much authority each manager has, and specifies how votes will be cast when decisions have to be made.

  • Capital Contribution

When deciding whether to start a business with other people, it helps to have a clear understanding of how profits and debts will be split. It’s important to think about the cost of losing a lawsuit because it may not be as much as you think.

  • Sharing

This component specifies how the company will receive more money and what type of ownership units it will receive in exchange. It also describes when the company needs to pay back the ownership units.

  • Membership Changes

If a member decides to leave or dies, the membership agreement should address how to handle the situation. This section of the operating agreement should describe how to remove a member and what happens if the LLC has less than three members.

  • Dissolution

If the company should dissolve, this clause specifies what will happen to the business assets and more. What happens to a firm’s assets if it dissolves depends on the type of entity and how much has been paid to creditors.

Step 4: Start up Your LLC Business

There are only a few things you have to do before starting to make a Profit.

Develop an EIN from IRS

When you need to hire employees, open a business bank account, apply for a business license, or register with the city or state, you’ll need an Employer Identification Number (EIN). Information about a business entity is stored using an Employer Identification Number.

If you don’t already have an EIN, the IRS will give it to you for free. Alternatively, you can get it via fax or mail, though the IRS suggests you use their online system since the fax system is only available during business hours. It takes about four days to get the EIN through email or fax, and about two minutes to get it through the IRS website.

Open Bank Accounts of Company 

If you’re operating your business through a limited liability company, make sure you keep your personal and business expenses separate to maintain that LLC’s limited liability protection. If you’re a business owner, using a business bank account will allow you to easily separate your income and expenses. The process of obtaining business credit will give you a record of all of your transactions and will help you plan better for business expenses.

Please note that every bank is different, so you should visit your local branch to ask about their requirements. Sometimes it’s easier to handle business finances through an LLC account.

Launch Your Business

Now you have taken the necessary legal steps to operate a business and you are ready to proceed!

It’s wise to check with a government agency whether you need to get any licenses or permits to run a business. Remember to keep your business’s records up-to-date, including meeting minutes, contracts, employment taxes, financial records, and income tax returns.

LLCs are created to allow individuals to run businesses without getting involved with personal matters such as paying employees, filing taxes, or having other people sue your business.