Many small and medium business owners decide to set up an LLC for legal liability protection. An LLC or Limited Liability Company exists separately from its owners, and the owners are usually not responsible for any business debts. LLC are much easier and flexible to set up than anything, aka corporations. Moreover, LLC also tend to have fewer ongoing requirements for the registration.
However, many people search on the internet for the query “how to start an LLC?”. If you come across this article by searching this term, then we do think that your search ends here. To form an LLC, you have to complete the paperwork with the state where your business is located. There are several steps that you need to follow to create an LLC.If you need any help regarding LLC registration, then please visit lawsuitFAQ.com LLC Guide.
How to start an LLC?
- Choosing a name for LLC
Most states do not allow the same name for two business entities. Therefore, It is required to have the unique name, and no other business must be running on the particular business name. It is even necessary if the same company name is located in different cities.
Many states also restrict some words like “Bank” use in a company name.
It is always a wiser decision to research carefully about the business name. You can also register the domain name for the particular business name. Just make sure nobody else is using the same business name before, else they will have rights to take down your business, or claim a trademark issue.
- Reserving a name (Optional)
It is possible in some states. It means, if you want to reserve your business name but does not want to register for LLC documents right away. Then It is possible to reserve your chosen business name by paying a small registration fee to the state agency.
- Choosing a registered agent
Every state requires the company to choose a registered agent for LLC. A registered agent who will agree to receive all the notifications, lawsuits, promotions, and other official documents on behalf of LLC and also, to pass them to the appropriate person in LLC.
Many states allow anyone who is the resident of the particular state for more than 18 years and worked as a registered agent for the company. Some companies do provide the registered agents by taking some fee.
- Prepare an LLC agreement
You need to prepare an LLC agreement. It will be a roadmap to your business that will include owner interests and how your business is going to run.
How the profits and losses will be allocated, how the meetings will be held, and all the other important details of your business will be mentioned in this agreement.
- File organizational paperwork with the state
Every state has its own rules and form. It will help if you find the “articles of organization” that list these things.
- The name and address of the LLC
- The length of its existence, if not perpetual
- The name and address of the registered agent
- The purpose for which the LLC was formed
The paperwork must be signed by the owner or the person whoever is forming the LLC.
In some states, you have to file this document with the secretary of the state to complete the paperwork process.
- Obtain the certificate
Once the documents are filed and approved by the secretary of the state, the state will issue the current or new document, which ensures that the LLC for your business is successfully formed.
Once you received the hard copy of your certificate. You can continue doing the other things like obtaining a business tax ID number and other usual formalities.
- Register to do business in other states (optional)
If your LLC does business in more than one state, then you may also have to register your business in the particular states for the approval of your business.
You have to complete the similar paperwork process to complete all the legal formalities for receiving the new LLC certificate for a particular state.
LLC is a popular and flexible business option that works well with small and medium companies. In most states, LLC is way to easy to obtain and setup. However, It is still important to complete all the paperwork processes for obtaining the proper LLC certificate, which actually defines the member’s rights and responsibilities.