A limited liability company, or LLC, is a business structure that offers personal liability protection and flexibility when it comes to taxes and management. Because of these features, an LLC is a popular choice for small businesses and startups.
If you’re thinking of starting an LLC, here are a few things you need to know about how to form one.
Choose a business name
The first step in forming an LLC is choosing a name for your business. When choosing a name, you’ll want to make sure it’s available as a business name and as a web domain. You can check business name availability on the Secretary of State website in your state.
File your Articles of Organization
The next step is to file your Articles of Organization with your Secretary of State. This is a simple document that includes your business name, address, and the names of your LLC’s members.
Create an Operating Agreement
An Operating Agreement is not required in all states, but we recommend creating one even if it’s not required. This document outlines the ownership and management structure of your LLC, and can help prevent future disagreements among members.
Get an Employer Identification Number (EIN)
An EIN is a unique nine-digit number that is assigned to your LLC by the IRS. You’ll need an EIN if you have employees, or if you plan to open a business bank account.
Comply with state and local regulations
Depending on the type of business you’re starting, you may need to obtain other licenses and permits. For example, if you’re starting a restaurant, you’ll need to obtain a food service license.
Open a business bank account
Once you have your EIN, you can open a business bank account in the name of your LLC. This will help you keep your personal and business finances separate.
File your annual report
Most states require LLCs to file an annual report. This is simply a document that updates the state on your LLC’s contact information and member list.
By following these simple steps, you can start your LLC and enjoy the personal liability protection and flexibility it offers.
