How to Start an LLC (Step-by-Step Guide)

Over 5 million new businesses were formed last year—2023—and this number is set to explode to 6 million in 2024—an all-time high!

If you’re considering forming an LLC, you’re making a smart choice for protecting your assets while enjoying flexibility in business operations.

That’s what every smart business owner should do right now.

To establish your LLC successfully, you must choose a unique business name, designate a registered agent, file LLC Articles of Organization, create an operating agreement, and file an annual report.

But there’s more.

Depending on the state, filing your Articles of Organization costs about $50 – $500, and it takes 5 – 15 business days to be approved.

This guide compiles all the information you need to start an LLC today.

What are the steps to Forming an LLC in the United States?

To start an LLC in any of the 50 states, you need to:

• Step 1. Decide on a unique name for your LLC
• Step 2. Choose a State to register your LLC
• Step 3. Designate a registered agent
• Step 4. File Articles of Organization
• Step 5. Determine your LLC management structure
• Step 6. Create an Operating Agreement
• Step 7. Get an EIN from the IRS
• Step 8. Obtain business licenses and permits
• Step 9. File a BOI report

Step 1: Decide on a Unique Name for Your LLC

Choosing a name for your LLC is the first step in starting your business. Your name should represent what you do and not mislead the public.

First, ensure your LLC name is distinguishable from other active businesses in your state. Use your state’s name availability search tool to check if your desired name has already been taken.

Your name must include an LLC indicator, such as:

• Limited Liability Company
• L.L.C.
• LLC

You can abbreviate terms like “Limited” to “Ltd.” This shows your business type clearly.

Some words are not allowed in your LLC name. Avoid terms that could confuse the public or suggest government affiliation, like “Department” or “FBI.”

If you find a suitable name, consider reserving it. This prevents others from using it while you finalize your paperwork. To reserve a name, file a form with the Secretary of State and pay a small fee, typically $10 to $50. Reservations last from 90 days to a year, depending on your state.

Think about using a DBA (Doing Business As) name. This allows you to operate under a different name while keeping your LLC’s official name intact. You can register a DBA through your state’s Secretary of State office.

By taking these steps, you’ll ensure your LLC name is unique and ready for business.

Step 2: Choose a State to Register Your LLC

Choosing a state to register your LLC is an important step. You can pick any state, but many people choose their home state for convenience.

Local resources, like lawyers and government offices, are easier to access when you’re in the state where you live.

Some business owners look for states with lower costs or taxes. Delaware is well-known for its business-friendly rules. It does not tax out-of-state income, making it a popular option for those who don’t want to pay tax on out-of-state sales.

Delaware has privacy laws in place to protect the members of every LLC from being disclosed to the public.

Wyoming stands out for its lack of state income tax, affordable sales tax rate, currently 4%, and relatively low LLC filing fee of $100.

In addition, Wyoming is known for its strong privacy protections. Unlike many other states where registered businesses’ contact and member details are made public, Wyoming allows this information to remain confidential.

When registering in a different state, you need a physical address to receive official mail. Many people hire a registered agent. This agent can handle mail and legal papers on your behalf, making it easier to manage your business from afar.

You must register a foreign LLC if your business has a physical presence (e.g., storefronts, offices, sales reps, etc.) in different states.

Remember that just because a name is available in one state doesn’t mean it’s available everywhere. If you plan to expand later, consider securing your name in multiple states.

It’s also good to check each state’s requirements for forming and keeping your LLC active. Doing your research now can save you headaches down the road.

State-specific Guides – Starting an LLC

If you need additional or specific help to start an LLC in any of the states, check out these valuable resources:

However, if you want someone to handle the entire process, I highly recommend hiring a Northwest Registered Agent (my review link).

Step 3: Designate a Registered Agent

A registered agent (a resident or statutory agent) receives essential legal documents for your LLC. These documents include lawsuits and official notices. It’s crucial to have someone you trust to handle this responsibility.

Who Can Be a Registered Agent?

You have a few options for who can be your Registered Agent:

• You: You can act as your registered agent, but remember you must be available during business hours to receive documents.
• A Family Member: A trusted family member can be your registered agent.
• An LLC Formation Service: Professional services offer expertise in handling official correspondence and ensuring compliance with state regulations.
• A Lawyer: A legal service firm can also serve as your registered agent, providing additional legal support if needed.

Requirements for Registered Agents

Your registered agent must have a physical address in the state where your LLC is registered (P.O. Boxes are not allowed). The address must be where the agent can consistently receive legal documents and official mail during regular business hours.

Additionally, the registered agent must be at least 18 years old and available to accept service of process. This means they must be present to handle any legal notices or court documents delivered to the LLC.

What registered agents do I recommend?

While a few top registered agent services are legit, I highly recommend Northwest registered agent services for obvious reasons.

They offer a range of benefits that set them apart, including a free year of registered agent service, which helps you save (about $300) on initial costs.

You’ll receive a complimentary operating agreement essential for outlining your LLC’s internal structure. My favorite part? Northwest also allows you to use their office address for your LLC filing, keeping your address off public records and enhancing your privacy.

Their free email forwarding service ensures you stay on top of important correspondence, and their exceptional customer support is always available to assist you whenever needed. Read my guide on the best LLC registered agent services to see why Northwest is the best.

Step 4: File LLC Articles of Organization

Filing the Articles of Organization is a critical step in forming your LLC. This document officially creates your business in the eyes of the state.

Depending on where you are, it may also be referred to as a “certificate of formation” or “statement of information. “

Your Articles of Organization typically contain:

• LLC Name: The official name of your business.
• Business Address: The primary location of your LLC.
• Purpose and Duration: Why your LLC exists and how long it will last.
• Management Structure: Will the LLC be managed by its members or a manager?
• Registered Agent: The name and address of the person or business responsible for receiving legal documents.
• Organizer Signature: One or more organizers must sign the document.

Most states allow you to file online, which is the easiest way to handle the paperwork. Alternatively, you can mail in a paper application. Many people choose online services for convenience and to avoid mistakes.

The cost to file varies by state, generally ranging from $50 to $200. Some states process LLC articles of organization instantly, while others take a few days to weeks (with some charging an extra fee for expedited processing). Make sure to check your state’s specific requirements.

Once filed and approved, you’ll receive a certificate confirming your LLC is officially formed.

Step 5: Determine Your LLC’s Management Structure

Before creating your LLC operating agreement, you must choose how your company will be managed.

There are two main structures to consider:

• Member-Managed LLC: All members (owners) are involved in daily operations in this structure. This is common for smaller LLCs. It is a good choice if you and other members want to be hands-on.
• Manager-Managed LLC: Here, you designate one or more individuals as managers. These managers make day-to-day decisions. They don’t have to be owners. This option is helpful for larger LLCs or when some members prefer not to be involved daily.

Smaller companies might benefit from a member-managed structure, while larger ones may need more defined roles that fit a manager-managed approach.

Think about how involved you want to be. If all members wish to participate, choose member-managed. If not everyone wants to manage tasks, consider manager-managed.

Deciding now can help set clear responsibilities. This can improve daily operations and lead to a more successful business. Take your time to think through this choice. It will impact how your LLC runs and grows.

Step 6: Prepare the LLC Operating Agreement

An operating agreement is a crucial document for your LLC. It sets the rules for how your business will run and defines the rights and responsibilities of all members.

Though only a few states require this document, creating one is wise. Without it, your LLC will follow default state laws, which may not fit your business needs. It also helps prevent misunderstandings among members and protects your limited liability status.

Here are some key components to include in your operating agreement if you choose to prepare one:

• Ownership Structure: Listing all members and their ownership percentages.
• Management Roles: Specify who will manage the LLC. This can be member-managed or manager-managed.
• Decision Making: How will decisions be made?
• Voting Rights: Define how decisions will be made. Will all members have equal votes?
• Profit Distribution: Explain how profits and losses will be shared among members.
• Meeting Procedures: Outline how often meetings will occur and how members will be notified.
• Amendment Process: Describe how changes can be made to the agreement in the future.

While single-member LLC owners can draft their operating agreement, it’s generally wise to seek the advice of a qualified business attorney when forming a multi-member LLC.

Though this might slightly increase your startup costs, it can save you significant time, money, and potential disputes.

In short, a well-prepared operating agreement can help your LLC run smoothly and protect your interests.

Step 7: Obtain EIN for Your LLC

Once your LLC is established, you must get an Employer Identification Number (EIN) from the IRS. This unique nine-digit number identifies your business for tax purposes, similar to a Social Security number.

Single-member LLCs without employees can technically use the member’s Social Security number instead of an EIN.

However, many banks require an EIN to open a business account.

Additionally, using an EIN instead of your Social Security number can better safeguard your personal information, making it a smart choice even for single-member LLCs.

For LLCs with multiple members or any employees, an EIN is mandatory under federal law for tasks such as hiring employees, filing taxes, and applying for business licenses.

How to Apply for an EIN:

• Online: Visit the IRS website. This is the fastest way to get your EIN.
• By Mail: Fill out Form SS-4 and send it to the IRS. This option takes longer.
• By Fax: You can also fax the completed Form SS-4.
• Phone: U.S. residents can call the IRS at 1-800-829-4933 to apply.

How Much Does It Cost To Get EIN?

Obtaining an EIN is free. However, some services charge $100 or more to help you with the entire process.

How Does it Take to Obtain my EIN?

• Online: Get it immediately.
• By Mail: Expect 4 to 6 weeks.
• By Fax: Usually within four business days.

Once you receive your EIN, you can set up a business bank account. This will help you manage your LLC’s income and expenses efficiently. Plus, it’s vital for obtaining lines of credit and making contracts with vendors.

Step 8: Obtain Business Licenses and Permits

You must secure the proper licenses and permits to run your LLC legally. The requirements depend on your business type and location.

Here are some standard permits you may need:

• Seller’s Permit: If you sell taxable goods or services, you likely need a seller’s permit to collect sales tax.
• General Business License: Some states and many local areas require a general business license. Check with your city or county for details.
• Industry-Specific Licenses: Certain businesses require special licenses, such as liquor licenses, health permits, and occupancy permits. This often involves regulations from local, state, and federal agencies.
• Registration in Other States: If your LLC operates in multiple states, you must register as a foreign LLC in each state where you do business.
• DBAs (Doing Business As): If you operate under a name different from your LLC’s official name, you might need to file for a DBA. Requirements vary, so check local regulations.

To ensure you meet all requirements, consult local and state government offices. Industry trade associations can also provide valuable information. Consider working with a business advisor for assistance in navigating these regulations.

Stay aware of any deadlines for applications and renewals. Missing these can impact your LLC’s legal status.

Step 9: File a BOI Report

Under the Corporate Transparency Act, LLC owners must submit a Beneficial Ownership Information (BOI) Report to the US Financial Crimes Enforcement Network (FinCEN) starting in January 2024.

Companies created before January 1, 2024, must file their report before January 1, 2025. LLCs formed after January 1, 2024, must file within 90 days of their formation. Those formed after January 1, 2025, have 30 days from receiving notice of approval.

This report includes details similar to those in your Articles of Organization, like your LLC’s name, full name of members, addresses, and identification documents.

It can be submitted online at the FinCEN website at no cost.

This rule applies to various entities, including many LLCs, corporations, and others established by filing with a Secretary of State or a similar U.S. office.

The report is designed to reveal details about a business’s “beneficial owners,” which include individuals who have significant control, own more than 25% of the company, or derive substantial economic benefit from its assets.

Certain entities, including large companies with over 20 full-time employees, tax-exempt organizations, and publicly traded companies, are exempt from filing. Exemptions include:

• Public Utilities
• Government authorities
• Insurance companies
• Financial institutions
• Companies formed under the Commercial Exchange Act

A foreign company operating in the U.S. is also classified as a reporting company and must submit a BOI report. Additionally, even if a business has ceased operations, it may still be required to file if it hasn’t been officially dissolved.

Missing the filing deadline or submitting inaccurate information can lead to fines of $500 per day or even a jail sentence of up to two years.

What are the Different Types of LLCs?

Each type of LLC has unique benefits and challenges. When choosing the proper structure, consider your business needs and consult a professional.

Here are some of the most common types you can choose from:

Domestic LLC

A domestic LLC is a limited liability company formed and operates in the state where it was initially established.

When you create an LLC in your home state by filing the necessary documents, such as Articles of Organization, with the state government, it is considered a domestic LLC.

For example, if you form an LLC in New York and conduct business there, your LLC is considered a domestic LLC in Illinois. If you want to do business in another state, like Illinois, you must register your LLC as a foreign LLC in Illinois.

Foreign LLC

A foreign LLC is a limited liability company initially formed in one state but registered to do business in another.

For example, if you establish an LLC in California and then decide to conduct business in Nevada, your LLC would be considered a foreign LLC in Nevada.

To legally operate in Nevada, you must register your California-based LLC as a foreign LLC with the Nevada Secretary of State, typically by filing the necessary paperwork and paying any required fees.

This process allows the LLC to legally conduct business in the new state while maintaining its original formation in the home state.

Professional LLC (PLLC)

A Professional LLC (PLLC) is a limited liability company designed for licensed professionals who provide specialized services.

Unlike a standard LLC, a PLLC is intended for individuals in fields where state laws require a professional license to practice, such as doctors, lawyers, accountants, architects, and engineers.

A PLLC offers the same benefits as a regular LLC, including limited liability protection, which shields the owners (known as members) from personal liability for the business’s debts and obligations.

However, there are vital distinctions:

• Licensing Requirements: All members of a PLLC must typically hold the necessary professional licenses required to practice their profession in the state where the PLLC is formed.
• Professional Liability: While a PLLC protects members from personal liability for business debts, it does not protect against professional malpractice claims. Each member remains personally liable for their professional actions.
• State Regulations: States regulate PLLCs differently, and not all states allow the formation of PLLCs. Some states require specific language in the company name, including “PLLC” or “Professional Limited Liability Company.”

Series LLC

A Series LLC is a unique form of limited liability company that allows a single LLC, known as the “parent” or “umbrella” LLC, to create multiple “series” or “cells” within it.

Each series can have its assets, liabilities, members, and operations; crucially, each is treated as a separate entity for liability purposes. One series’s debts, obligations, and liabilities do not affect the others or the parent LLC.

A Series LLC benefits businesses that manage multiple investments or projects, such as real estate investors who own multiple properties.

Using a Series LLC, they can categorize the risk associated with each property while simplifying their organizational structure.

Low-Profit LLC (L3C)

A Low-Profit Limited Liability Company (L3C) is a particular type of LLC designed to bridge the gap between for-profit businesses and nonprofit organizations.

The L3C structure allows a company to pursue a socially beneficial purpose while operating as a for-profit entity. It’s mainly geared toward businesses that want to attract philanthropic investments, such as those from foundations and traditional capital.

Restricted LLC

A Restricted LLC is a limited liability company with specific restrictions on distributing its assets and earnings to its members.

For example, the LLC might be restricted from making distributions until a specific date or event occurs, such as the death of a founding member, reaching a specific financial milestone, or passing some years after the LLC’s formation.

This structure is often used for estate planning purposes, particularly in family businesses, to preserve wealth and ensure that assets are managed per the long-term goals of the founders or owners.

By restricting distributions, the LLC can ensure that assets are preserved and used according to the founding members’ wishes rather than being quickly depleted.

A Restricted LLC is not widely recognized across all states. Nevada is the only state that offers a specific legal framework for Restricted LLCs.

Anonymous LLC

An Anonymous LLC is a limited liability company (LLC) structured to keep the identities of its owners, also known as members, confidential and not publicly disclosed.

This type of LLC particularly appeals to individuals or entities that prioritize privacy and wish to keep their involvement in a business out of public records.

As of August 2024, only four states permit Anonymous LLCs: Delaware, Wyoming, Nevada, and New Mexico. These states do not require the names of the LLC’s owners to be listed in public records.

While an Anonymous LLC offers privacy at the state level, it is essential to note that this anonymity does not extend to all aspects of business operations.

For example, suppose the LLC opens a bank account, applies for loans, or engages in certain regulated activities. In that case, the members’ identities may still need to be disclosed to financial institutions or government agencies.

Single-Member LLC

A Single-Member LLC (SMLLC) is a limited liability company with only one owner, the sole member. It is a popular business structure for individuals who want the benefits of an LLC but without the complexity of having multiple members.

Like all LLCs, a Single-Member LLC provides its owner with limited liability protection. This means the owner’s assets are generally protected from the company’s debts and legal obligations.

For tax purposes, the IRS usually treats a Single-Member LLC as a “disregarded entity,” meaning the business is not taxed separately.

Instead, the LLC’s profits and losses pass through to the owner’s tax return, and the owner pays taxes on the income as if it were earned directly. This avoids the double taxation that can occur with corporations.

While a single-member LLC’s default tax status is a sole proprietorship (disregarded entity), the owner can elect to have the LLC taxed as a corporation (either an S corporation or a C corporation) if desired.

Single-member LLCs are relatively easy to manage. There are fewer formalities and paperwork requirements than in other business structures, such as corporations.

Multi-member LLC

A Multi-Member LLC (MMLLC) is a limited liability company with two or more owners, known as members.

This business structure offers the benefits of an LLC, such as limited liability protection, while allowing multiple individuals or entities to share ownership and management responsibilities.

By default, a Multi-Member LLC is treated as a partnership for federal tax purposes. This means that the LLC itself does not pay taxes on its income.

Instead, the profits and losses of the business are passed through to the members, who report them on their tax returns. Each member pays taxes on their share of the profits based on their ownership percentage.

While the default tax status for a Multi-Member LLC is as a partnership, the LLC can also be taxed as a corporation (either an S corporation or a C corporation) if that suits the members’ financial strategies.

Multi-member LLCs can choose between member-managed or manager-managed structures.

What are the Different Methods To Start an LLC?

There are several ways to start an LLC, each with advantages and disadvantages. You can do it yourself, use an online service, or hire a professional attorney. Each option has different costs, processes, and levels of support.

DIY LLC Formation

When you opt for DIY LLC formation, you take on the task yourself. This method involves filing the necessary paperwork with your state and ensuring you meet all the legal requirements.

Pros:

• Cost-effective: You pay only for state fees.
• Control: You handle everything, ensuring it meets your preferences.
• Learning experience: You gain knowledge about the LLC formation process.

Cons:

• Time-consuming: Researching laws and paperwork can take a lot of time.
• Potential errors: Mistakes can lead to legal issues or delays.
• Less support: You won’t have professional guidance.

Using a Professional/Online LLC Formation Services

Many online services help you form an LLC quickly and easily. These companies provide templates and guidance, simplifying the process.

Pros:

• Convenient: Simple forms and processes save you time.
• Guidance: Many services offer customer support to answer questions.
• Speed: Formation can happen faster than DIY methods.

Cons:

• Cost: There are service fees on top of state fees.
• Variable quality: Not all services provide the same level of support.

Hiring an Attorney

Hiring an attorney for LLC formation ensures you get professional assistance. They can tailor the process to your specific needs and handle complex issues.

Pros:

• Expert guidance: Attorneys understand the legal nuances of forming an LLC.
• Customized service: You receive a tailored approach that fits your business.
• Avoid mistakes: Reduced risk of errors with legal paperwork.

Cons:

• Higher cost: Attorney fees can be significant.
• Less control: You may rely on others to handle the details.
• Time investment: Scheduling and meetings can take time.

Each method has strengths and weaknesses. Before choosing, consider your budget, time, and comfort level with the legal process.

What is The Cheapest Alternative Way to Form an LLC?

There are several methods of forming an LLC. The most common include hiring a lawyer, using an online service, or doing it yourself (DIY).

DIY is often the cheapest option. By filing the necessary paperwork yourself, you can save on attorney fees. Most states allow you to file the Articles of Organization for a fee, usually between $50 and $200.

This DIY approach helps you avoid the extra fees of hiring a service or lawyer, saving you money for other business expenses.

However, while DIY is cost-effective, it requires some effort. You’ll need to understand all the forms and regulations, and missing a detail could delay your application or create problems later.

Consider using a registered agent if you prefer not to handle everything yourself.

They can make the process smoother by ensuring you receive important documents and helping you stay compliant with state requirements. Although this adds a bit to the cost, it can provide valuable support and peace of mind.

Who Provides the Best LLC Services?

There are a myriad of LLC services from which to choose. Choosing the wrong one can affect your LLC formation timeline—I know this from my experience using a few and researching a dozen over the years.

Here are some top-rated options you should consider:

Best LLC Service	Google Rating	LLC Formation Cost	Registered Agent Fee
Northwest Registered Agent	4.7/5	$39	Free for 1 year
Doola	4.6/5	$0 (plus state fees)	$297/year
Tailor Brands	4.4/5	$0 (plus state fees)	$199/year
ZenBusiness	N/A	$0 (plus state fees)	$199/year

Besides, the fact that other services bill you for their registered agent in the first year, and Northwest offers it for free, is a HUGE plus for me.

Northwest Registered Agent stands in LLC formation due to its commitment to transparency, customer service, and privacy. Using their address helps protect your personal information, making them a reliable choice.

How Much Does It Cost To Form an LLC?

The cost to form an LLC depends on the state where it is created. You could pay as little as $40 or as much as $500 to file your LLC paperwork. However, there are other fees you need to be aware of.

Here’s a breakdown of potential costs:

Expense	Cost Range
Filing Fee	$40 – $500
DBA	$20 – $50
Name Reservation	$20 – $50
LLC Formation Service	$39 (via Northwest)
Registered Agent Fee	$0 (via Northwest)
Operating Agreement	$0 – $600
Business Licenses	$10 – $100
Publication Fees	$40 – $1,500
Annual Report	$15 – $200
Estimated Total	$90 – $3,000

These costs add up, so researching your state’s fees is crucial. Remember, these initial expenses are just the beginning. You may face ongoing fees, like annual reports or franchise taxes, so plan your budget carefully.

Pros and Cons of Forming an LLC

6 Important Things To Do After Forming Your LLC: Staying Compliant

Once you form your LLC, several vital actions help you comply with state and federal laws. These steps ensure the proper operation of your business and protect your assets.

1. Research the Best Licenses and Permits for Your Business

You may need specific licenses and permits to operate legally, depending on your business type and location. Check local, state, and federal requirements first.

For instance, a restaurant needs health permits, while a construction business may require contractor licenses. Research your industry to understand what is necessary.

Use tools like government websites or consult local small business organizations. This ensures you stay compliant while avoiding fines or interruptions to your operations.

2. Create Business Accounts for Your LLC

To maintain your LLC’s liability protection, open a separate bank account for your business. This avoids mixing personal and business finances, which can jeopardize your protection if legal issues arise.

Choose a bank that suits your needs, and ensure you have an Employer Identification Number (EIN) ready for opening accounts. An EIN is essential for tax purposes and is usually required by banks for business accounts.

Additionally, consider applying for a business credit card to better track expenses. This separation simplifies accounting and helps build your business credit.

3. Understanding Tax Requirements and Managing Your Taxes

Know your federal and state tax obligations. As an LLC, your taxes depend on your business structure. Single-member LLCs report income on personal returns, while multi-member LLCs file partnership returns.

You need an EIN to file taxes, especially if you hire employees. Check state-specific taxes, like Illinois’ personal property replacement tax.

Maintain organized financial records throughout the year. This makes filing taxes more manageable and helps you identify deductible expenses, maximizing tax advantages available to your LLC.

4. File Your Annual Report

Most states require LLCs to file an annual or biennial report. This document updates your business information and confirms your ongoing operations.

Check the specific filing fees and deadlines in your state, such as Illinois. Missing deadlines may lead to penalties or loss of your LLC status. Mark your calendar and prepare to file beforehand.

Ensure that your report contains accurate information, as errors can complicate compliance. This simple task keeps your business in good standing.

The filing fee for an annual report can also be known as a franchise tax. 

5. Get Business Insurance for Your LLC

Having the right insurance is crucial for protecting your investment. Business insurance helps cover liabilities and risks associated with your business activities.

General liability insurance is typically a good start, as it covers various risks, such as accidents or damages on your business premises. Depending on your business type, you may also need specific coverage, like professional liability for consultants.

Conversely, if you run your business as a consultant and work remotely, you might only need professional liability insurance to cover potential service errors or omissions.

Assessing your business needs helps you choose the appropriate coverage to protect your LLC.

Contact insurance agents to discuss your needs and find competitive quotes. Getting insurance safeguards your LLC and may also be necessary to meet specific contractual or legal requirements.

6. File your LLC in other states

When you form an LLC in your home state, you establish a “state of formation” or “domestic state,” serving as your business’s primary base.

However, if you plan to expand your operations into other states, you must register as a foreign LLC in each state.

In this context, “expansion” refers to having a physical presence—such as an office, store, or employees—in another state. Failing to register your LLC in these new locations properly can result in significant fines and penalties.

To register your LLC in another state, follow these steps:

• Obtain a Certificate of Good Standing: Before reaching out to the new state, secure a certificate of good standing from your home state. This document confirms that your LLC complies with state regulations.
• Apply for Foreign Qualification: Contact the Secretary of State in the new state to complete a foreign qualification application. This form requires basic information about your business and typically involves a fee.
• Appoint a Registered Agent: As you did in your home state, you must designate a registered agent with a physical address in the new state. Northwest Registered Agent Services, which has offices in all 50 states, can help.
• Review Local Laws: Ensure that your business adheres to the laws and regulations of the new state, as compliance in your home state doesn’t guarantee compliance elsewhere.
• Prepare for Annual Reports and Fees: Be ready to file annual reports and pay any associated fees in each state where your LLC is registered.

7. Setup Your Business Online Presence (Optional)

Creating an online presence can enhance your business’s visibility and attract customers. You can start by creating a professional website.

Check the availability of your LLC’s name as a domain. Choose a catchy and relevant name for your brand.

If you’re not ready to build a complete website, reserve the domain name now to avoid missing out. You can create social media accounts to engage potential customers and share information about your services.

Consider using a “Doing Business As” (DBA) name if your official LLC name is complex. File the necessary form with your state to make this name official. Taking these steps can set you up for success in the digital space.

LLC vs. S Corp vs. Partnerships vs. Sole Proprietorship vs. Corporations

When starting a business, knowing the types of structures you can choose is essential.

Sole Proprietorship

Think of a sole proprietorship like a one-person lemonade stand. You run everything yourself, and all profits go directly to you. There is no legal separation between you and your business. This means that your personal assets are at risk if the business owes money.

Partnerships

Imagine a pizza shop run by two friends. They share the profits and responsibilities. In a partnership, both owners are personally liable for business debts. This can lead to solid teamwork but also potential disagreements.

LLC (Limited Liability Company)

An LLC resembles a protective shield for your pizza shop. It offers the flexibility of a partnership but with limited liability. This means your assets are safer if the business faces financial trouble. Owners can take profits directly or have them taxed at the company level.

S Corporation

Picture a well-organized team of chefs working in harmony. An S Corp is like that team, allowing you to avoid double taxation. Your business income passes through to your tax return. However, there are strict rules about ownership and stock.

Corporations

Think of a corporation as a big, corporate restaurant chain. It is a separate legal entity from its owners. This structure provides strong liability protection but comes with regulations and potential double taxation.

My Final Thoughts: Forming an LLC

Starting an LLC involves several clear steps:

• Choose a unique name
• Select a state to start your LLC
• Select a registered agent
• File articles of organization
• Determine your LLC management structure
• Draft an operating agreement
• Get an EIN
• Acquire necessary licenses and permits
• File a BOI Report

Being aware of the costs is essential when forming an LLC. The filing fee can vary by state, typically from $50 to $500. In addition, you may need to pay annual fees each year, which can be between $100 and $800, depending on your location.

Cost can be a significant factor, but forming an LLC provides advantages like limited liability protection and flexibility in management.

This structure can help protect your assets while keeping things simple for your business operations.

Taking these steps sets a strong foundation for your LLC. With proper planning and attention to detail, you can ensure that your business is positioned for growth and success.

Frequently Asked Questions

Can I form an LLC without a lawyer?

Yes, you can form an LLC without a lawyer. It can save you money. All you need to do is file the correct paperwork and appoint a registered agent.

What is the process to register an LLC online?

To register an LLC online, visit the Northwest Registered Agent website. They guide you through the filing process.

What are three things that LLCs are not required to do?

LLCs are not required to have annual meetings, maintain formal records, or issue stock. This flexibility helps simplify management for owners.

Can I change my registered agent?

Yes, you can change your registered agent at any time. You must file the change of registered agent forms with your state and pay any required fees.

How do I change my LLC’s name?

To change your LLC’s name, file an amendment with your state’s business filing office. This usually involves a fee and approval of the new name.

How do I renew my LLC?

Renewing your LLC typically involves filing annual reports or paying a renewal fee. Check your state’s specific requirements to stay compliant.

Can a non-resident open an LLC?

Yes, a non-resident can open an LLC in the U.S. However, requirements vary by state, so it’s important to research local rules.

How do I dissolve an LLC?

To dissolve your LLC, file articles of dissolution with your state and complete any necessary tax filings. Be sure to settle any remaining debts before dissolution.

How do I add a member to an LLC?

To add a member, you generally need to update your operating agreement. Depending on local laws, this may require filing an amendment with your state.

Can a minor own an LLC?

Yes, a minor can own an LLC. However, they may need an adult to help manage legal documents and business operations.

Does LLC expire?

An LLC does not expire automatically. However, it can be dissolved if you fail to meet state requirements or choose to close your business.

Can I buy a house or car with my LLC?

Yes, you can buy a house or car using your LLC. This can protect liability but ensure you follow proper business finance practices.

Can you have multiple businesses under one LLC?

Yes, you can operate multiple businesses under one LLC. However, be mindful that liabilities for one company may affect the others.

Can one person form an LLC?

Yes, one person can form an LLC. This is often called a single-member LLC, and it provides the same benefits as a multi-member LLC.