How to Get an LLC: A Step-by-Step Guide to Starting Your Business
Starting a business is a significant milestone, and forming an LLC is often the first step toward achieving your entrepreneurial goals. An LLC provides a balance of simplicity and protection, making it a preferred choice for many small business owners. The process involves several key steps, each of which requires careful attention to detail. Below, we break down the process into manageable sections to help you navigate the journey of establishing your LLC.
Choosing a Business Name
Your business name is more than just an identifier; it’s the foundation of your brand. When selecting a name for your LLC, ensure it complies with your state’s naming requirements. Most states require the name to include “Limited Liability Company” or an abbreviation like “LLC.” Additionally, the name must be distinguishable from other registered businesses in your state. Conduct a name search through your state’s business registry to confirm availability.
Filing the Articles of Organization
The Articles of Organization, also known as a Certificate of Formation in some states, is the official document required to establish your LLC. This form typically includes basic information such as the LLC’s name, address, registered agent, and the names of its members. Filing fees vary by state, ranging from $50 to $500. Once submitted, the state will review and approve your application, officially recognizing your LLC.
Appointing a Registered Agent
A registered agent is a person or entity designated to receive legal documents on behalf of your LLC. The agent must have a physical address in the state where your LLC is registered and be available during standard business hours. Many businesses opt to hire a professional registered agent service to ensure compliance and avoid missing critical notices.
Creating an Operating Agreement
While not always legally required, an operating agreement is a vital document that outlines the ownership structure, management roles, and operational procedures of your LLC. This agreement helps prevent disputes among members and provides clarity on how the business will be run. Even single-member LLCs can benefit from having an operating agreement in place.
Obtaining an EIN
An Employer Identification Number (EIN) is a unique tax identifier issued by the IRS. It’s required for hiring employees, opening a business bank account, and filing taxes. You can apply for an EIN online through the IRS website at no cost. The process is straightforward and typically takes only a few minutes to complete.
Comparison of LLC Formation Services
| Service | Price | Features |
|---|---|---|
| LegalZoom | $79+ | Name availability search, document preparation, registered agent service |
| Incfile | $0+ | Free filing for basic package, registered agent service for first year |
| Northwest Registered Agent | $225+ | Privacy protection, compliance alerts, registered agent service |
Compliance and Ongoing Requirements
After forming your LLC, you must comply with ongoing state requirements, such as annual reports and franchise taxes. Failure to meet these obligations can result in penalties or even the dissolution of your LLC. Stay organized by keeping track of deadlines and maintaining accurate records of your business activities.