Introduction
If you’re starting a business, you may be wondering how to form an LLC. If so, we’ve got the answers for you! To form an LLC in your state, follow these steps:
How to Register an LLC
You’ve decided to form an LLC. Great! Now what?
The first step is to form your LLC. You can do this yourself, or you can hire an attorney or accountant to help you with the process. It depends on how much experience you have as a business owner and how complicated your situation is. If you are forming a single-member LLC, then it’s easy enough for most people to handle themselves by simply filing documents at the state level with no filings required in multiple jurisdictions or at the federal level (unless there are requirements specific to your industry).
Once your LLC is formed, it must be registered with the state(s) where it operates so that people know who owns and controls its assets (you!). This is called “qualifying” an entity in business law lingo—and if done correctly will protect against lawsuits filed by people who believe they were harmed by one of its activities (such as someone suing because they were injured while using one of its products).
Name Your LLC
- Choose a name that is not too similar to other businesses.
- Don’t use a name that is too generic or too similar to another business in your area. Names like “Bread, Inc.,” “Locksmiths, Inc.,” or even “Furniture Store” may cause confusion among customers and make it difficult for them to identify which company they are contacting.
- Do not use your own name as the LLC’s name unless you have done some research into whether this would be allowed under the state laws of your state:
- If the person who owns an existing entity has been convicted of certain crimes within recent years (such as fraud or embezzlement), then he/she probably cannot form another one without first obtaining permission from the court where his/her case was adjudicated; ask an attorney about this if you are unsure whether such permission is required in your case.
Choose a Registered Agent
The registered agent is the person or business that will be authorized to accept legal papers on behalf of your LLC. The registered agent should be someone who can act as a point of contact for any issues that arise with your company and ensure they get resolved. Depending on which state you’re registering in, specific requirements for what kind of individual or business can serve as a registered agent may exist.
Generally speaking, any lawyer or accountant (or another type of professional) will do the job just fine; however, if one isn’t available in your area, you might have trouble finding one willing to take on this role. Your best bet is to choose someone who has experience working with small businesses like yours and understands everything that comes along with it—including taxes, accounting, and legal responsibilities.
File Certificate of Formation/Articles of Organization
You can find the form for your specific state by going to the Secretary of State’s website. You’ll file this with your state and pay a fee, usually 50-100 dollars. The time frame for filing varies depending on the state; some allow 30 days before you start conducting business, while others require it within 15 days of formation. If you’re unsure about any part of this process (or any other), talk to an attorney or an accountant who specializes in small businesses.
Create an LLC Operating Agreement
An LLC operating agreement is a contract between the members of an LLC, which outlines how the company will operate. It’s essential to create one because it provides rules for decision-making and management, as well as details on how profits will be distributed among the owners.
An operating agreement can also help you protect yourself from liability issues if someone sues your business. If you don’t have an LLC operating agreement, a court could find that you didn’t intend to form a separate entity at all—and that means you would be personally responsible for any debts or liabilities incurred by your company!
Creating an LLC Operating Agreement
Once you’ve decided to create this document, there are three ways to do so: use software like LegalZoom; buy professionally drafted forms from legal vendors; or hire an attorney (or law firm) to draft it for you specifically. All three options have pros and cons—some people prefer user-friendly software overpaying for expensive services or hiring attorneys who may not understand their needs fully—but before making any decisions about what route will work best for them individually here are some things both newbies and experienced entrepreneurs should keep in mind when creating their own documents:
Get an EIN
The EIN, or Employer Identification Number, is a unique number that the IRS assigns to businesses. It’s used for reporting income and other taxes. You’ll need an EIN if you want to hire employees or open bank accounts, so it’s important to apply for one early on in your company’s life cycle.
To get an EIN online:
- Go to irs.gov/businesses/small-
businesses-self-employed/ employer-identification- number-(EIN) - Follow the steps outlined on the page (it shouldn’t take more than five minutes). To speed up processing time, be sure all information is correct and complete before submitting your application. If there are any errors or missing details in your application—even minor ones—your request will be delayed until they are resolved by our staff!
Comply with Other Tax and Regulatory Requirements
It’s also important to comply with other tax and regulatory requirements. Some of these may seem obvious, but it’s not always easy to know exactly what you need to do in order for your business to be legally set up.
For example, if you sell products or services from a physical location—a storefront, an office building, etc.—you’ll need to pay sales tax. And if you hire employees (which isn’t required for an LLC), then you’ll need a business license and unemployment insurance registration.
In addition—and this is where things get really interesting—if one person owns all of the shares in the company and works on their own without any help from others (such as employees), then they may be considered self-employed by default; which means that they have fewer protections under the law than someone who actually employs others would receive (i.e., workers’ compensation insurance). To avoid this situation altogether, consider having at least two people join together when setting up an LLC: one who will work full-time while the other focuses on managing finances or strategic planning instead; both roles are equally important so don’t neglect either one!
Opening a Business Bank Account
If you are setting up your own business, it is important to open a business bank account. This will help you get started on the right financial foot and make sure that all of your transactions are handled properly.
First, find a bank that specializes in small business banking. These banks understand the needs of new businesses and can be more helpful than larger banks because they have more time to work with you and offer better customer service.
Second, make sure that your bank is approved to do business with your company by verifying their information through the SBA website or by calling them directly (you can also check this information at www.fdic.gov). You should also make sure that they are FDIC insured and have an ATM card for easy access to cash from anywhere there is an ATM machine nearby (there may be fees associated with using another person’s ATM). Lastly, choose a bank that fits well into your long-term growth plans for both current assets as well as future expansion plans if needed later down the road!
Obtain Necessary Permits and Licenses
It is important to ensure that your LLC has all the necessary permits and licenses before opening for business.
- List of Permits/Licenses
Commercial Activity License (CAL) – for businesses conducting retail sales or services within a city, county, or city-county area. The business may be exempt from this requirement depending on its gross sales and the type of location where it operates. Contact your local tax collector’s office for more information about CALs.
For more information about other types of permits and licenses, you might need as a small business owner: https://www.sba.gov/content/
File Business Taxes (Income, Payroll, Sales, etc.)
- File Business Taxes (Income, Payroll, Sales, etc.)*
Once your LLC is in place and ready to start filing taxes, it’s time to make sure you have the right documents ready.
When choosing which method of taxation you’ll use for your business, consider the following:
- File taxes as soon as you start: As soon as your LLC opens for business (or before), file an Employer’s Annual Federal Tax Return (Form 941) and a Quarterly Federal Tax Return on Form 941-QFT. This will allow the IRS to keep track of when tax payments are due throughout the year so that they can collect any money owed by your company on time.
- File taxes on a quarterly basis: Instead of waiting until January 31st each year, file these forms twice each month—on or before January 20th and April 15th—to ensure that the IRS has all information needed to calculate how much tax is owed by your company without delay. If this isn’t possible because some items can only be reported once per quarter rather than monthly/quarterly/yearly then make sure not forget them! You won’t want them showing up later with penalties attached due to late filings; remember everything has its place within the system! If needed fill out additional copies ahead of time so there aren’t any surprises during those busy months where everyone else seems like they’re getting away with murder while yours goes unnoticed… …kidding guys but seriously – don’t let anyone get away with anything other than what they owe us okay?
Forming your business the right way will reduce the risk of complications in the future.
- Properly setting up your business the right way can save you time and money in the future.
- Properly setting up your business will help you avoid legal complications with investors, customers, and contractors.
- Properly setting up your business will help you avoid tax complications that could result from not paying taxes on time or not complying with all of the current tax laws for LLCs.
- Properly setting up your business will also help avoid regulatory complications by complying with regulations set forth by local, state, and federal governments when creating an LLC entity.
Conclusion
As you can see, forming an LLC isn’t difficult. But it is important to do it right. It’s always good to have someone who knows the legal side of things on your team if you don’t have any experience in this area yourself. You may want an accountant or lawyer who specializes in small businesses and can help guide you through all these steps before making any big decisions about your business structure.