Business Tips: An Easy Guide To Forming An LLC

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March 25, 2022 Business

The LLC, or limited liability company, is a popular business structure for small businesses and startups. An LLC offers protection from personal liability for business debts and liabilities. It also provides flexibility in how the business is managed and taxed. If you’re thinking of starting an LLC, there are a few things you need to know. Here’s a quick guide to forming an LLC.

Choose a business name

Your LLC’s name must be unique and distinguishable from other businesses. It can’t be the same as or similar to another company’s name. You can search for business names online through the Secretary of State website in your state. You can check out LLC formation services at CompareLegalForms.com to find the right LLC formation package for your business. If you need help naming your LLC, a business name search tool can help you brainstorm ideas. This tool generates hundreds of possible business names and checks to see if the domain name is available. It’s free to use, and you can even save your favorite names for later. By the way, your LLC’s name doesn’t have to include the words “LLC,” “limited liability company,” or any similar designation. Its name can be anything that isn’t misleading or confusing to potential customers.

File the Articles of Organization

The next step is to file your Articles of Organization with the Secretary of State in your state. This is a simple document that includes your LLC’s name, address, and contact information. It also needs to include the names of your LLC’s organizers (the people who are forming the LLC), as well as the purpose of your LLC. Once you’ve filed your Articles of Organization, your LLC is officially formed. If you need help filing your Articles of Organization, you can use a service like LegalZoom. This service will help you prepare and file your Articles of Organization for a fee. Its services include a free consultation to help you determine which LLC formation package is right for your business. By the way, if you’re forming an LLC in more than one state, you’ll need to file a foreign qualification application in each state where you plan to do business. This lets other states know that your LLC is authorized to do business in their state.

Create an Operating Agreement

An Operating Agreement is a document that outlines the ownership and management structure of your LLC. This agreement is not required in every state, but it’s a good idea to have one regardless. Your Operating Agreement should include information like the names of your LLC’s members (the people who own the LLC), how you plan to run the LLC, and what will happen if someone wants to leave the LLC. You can find template Operating Agreements online, or you can hire an attorney to help you create one. If you have more than one member in your LLC, it’s especially important to have an Operating Agreement in place. This document will help prevent disagreements and disputes down the road.

Get an Employer Identification Number (EIN)

Your LLC will need its own Employer Identification Number (EIN) from the IRS. This is a nine-digit number that is used for tax purposes. You can apply for an EIN online, by fax, or by mail. If you’re the only member of your LLC, you can use your Social Security number instead of an EIN. However, it’s generally a good idea to get an EIN for your LLC, even if you’re the only member. It can make filing taxes and opening a business bank account easier. Plus, it can help you avoid potential identity theft. If you’re not sure whether you need an EIN for your LLC, consult with an accountant or tax specialist. It’s best to err on the side of caution and get one just in case.

Comply with all state and local requirements

Once your LLC is formed, you’ll need to comply with all state and local requirements for businesses. This may include getting a business license, permits, or zoning approval. You can find out what requirements apply to your business by contacting your city or county clerk’s office or the Small Business Administration (SBA). If you’re not sure where to start, your state’s Secretary of State website may be a good place to start. This website typically has information about starting and running a business in your state. Its staff can also help you find the right state and local agencies to contact.

Your LLC is officially formed once you file your Articles of Organization with the Secretary of State. However, there are a few more steps you should take to get your business up and running. Be sure to comply with all state and local requirements, get an Employer Identification Number (EIN) from the IRS, and create an Operating Agreement.