How To Start An LLC In 7 Steps 2024: When launching a business, setting up an LLC (limited liability company) correctly is crucial. An LLC not only provides your business with liability protection but also offers other benefits that can prove to be advantageous in the long run. To start an LLC, you need to follow seven simple steps.The first step is to choose a unique name for your LLC and ensure it complies with state laws. The second step involves appointing a registered agent who will receive legal documents on behalf of the LLC. Thirdly, you need to file Articles of Organization with the state’s secretary of state office.Next, create an operating agreement outlining the ownership and management structure of the LLC. After this, obtain necessary licenses and permits required by your industry or state laws.

Then apply for an Employer Identification Number (EIN) from the IRS for tax purposes. Lastly, open a business bank account to keep personal and business finances separate.By following these steps, you can start an LLC smoothly and efficiently while ensuring that you comply with all legal requirements. It is important to note that some states may have additional requirements or different procedures for forming an LLC, so it’s always best to research thoroughly before proceeding. Additionally, hiring a lawyer specializing in business formation can also help ensure that everything is done correctly from the start and avoid any legal complications down the road.

What Is an LLC?

A Limited Liability Company (LLC) is a legal entity that U.S.-based business owners can opt for to operate their enterprise. One of the key benefits of forming an LLC is that it offers protection for personal assets in case of legal issues or bankruptcy. Moreover, LLCs provide flexible taxation options as different businesses may have varying tax requirements. An LLC can choose to be taxed as a sole proprietorship or as a corporation, depending on their preference and the nature of their business activities. It is recommended to seek the advice of a tax advisor to determine the best taxation option for your LLC.

However, it is important to note that forming an LLC requires adherence to state laws and regulations. Each state has its own rules regarding LLC formation, so it is essential to research and comply with these requirements. This includes registering your LLC with the state government, obtaining necessary licenses and permits, and filing annual reports. Failure to comply with these regulations can lead to legal penalties and even dissolution of your LLC status. Therefore, it is crucial to ensure that you are fully aware of all the legal obligations involved in forming an LLC before proceeding with this type of business structure.

How To Set Up an LLC

Starting an LLC can seem overwhelming, but you can simplify the process by following a seven-step guide. It’s worth noting that legal requirements and procedures vary from state to state, so reviewing state-specific LLC formation guides can be helpful in finding relevant information. The seven steps to forming your LLC are: choosing a name for your business, nominating a registered agent, submitting articles of organization, creating an operating agreement, obtaining necessary licenses and permits, acquiring an EIN from the IRS, and opening a business bank account. By taking these steps and complying with your state’s requirements, you can begin your LLC with ease and confidence. It is important to keep in mind that some states may have additional requirements or fees that need to be met before the LLC is considered legally established. Therefore, it is recommended to research thoroughly before starting the process.

1. Decide on a Business Name

When selecting a name for your business, marketing may be one of the primary concerns. However, it is also crucial to ensure that the name complies with state laws and regulations. State law requirements vary by location, but they typically involve verifying that the chosen name is not already in use by another business and does not contain prohibited words or phrases. Additionally, some states may require specific language or designations to be included in the name based on the type of business entity you are forming, such as LLC or Inc. It is recommended to consult with a legal professional to ensure that your chosen business name meets all necessary legal requirements.

When it comes to choosing a business name, state laws typically prohibit the use of a name that’s already being used by another business in your state. Additionally, certain words that suggest you’re in a particular industry, such as “insurance” or “banking,” may also be prohibited. To ensure compliance with regulations, many states require businesses to include some version of “LLC” or “limited liability company” at the end of their names. It’s important to research your state’s specific laws and guidelines regarding business names before making any decisions.

To ensure that your LLC’s name is unique and follows your state’s requirements, you can visit the website of the responsible state agency, typically the Secretary of State, and perform a name search. This will help you determine if the name you have in mind is available or taken. It is important to carefully review your state’s naming guidelines before selecting a name to avoid any legal issues in the future. Keep in mind that some states may require additional steps or documents to register your LLC’s name, so it is best to research thoroughly and follow all necessary procedures.

2. Designate a Registered Agent

When you form a limited liability company (LLC), it is mandatory to have a registered agent. The registered agent’s primary responsibility is to receive important legal documents like subpoenas, lawsuits, and other official government correspondence on behalf of the LLC. Once received, the registered agent forwards these documents to the LLC. Hiring a registered agent ensures that your LLC stays compliant with state laws and regulations. It also provides an added layer of privacy as the registered agent’s address is used for official correspondence instead of the business owner’s personal address. Keep in mind that the registered agent must be available during regular business hours, so it may be beneficial to hire a professional service if you are unable to fulfill this requirement yourself.

When it comes to registered agents, anyone who is at least 18 years old can be appointed, including yourself or an employee. However, the agent must be available at a physical address within your state during normal business hours. Alternatively, you can opt for a company that provides registered agent services, but this will come at a cost. Pricing for such services may exceed a hundred dollars per year.Choosing to designate a company as your registered agent has its benefits. For instance, it ensures that you have a reliable and professional point of contact for any legal documentation or notices that your business receives. Moreover, it allows you to maintain privacy by keeping your personal address off public records. While it may seem like an added expense, the peace of mind and convenience offered by a registered agent service can be invaluable to small business owners who are looking to streamline their operations and minimize risks.

Should I Be My Own Registered Agent?

You have the legal right to serve as your LLC’s registered agent in any state. However, just because this option is open to you doesn’t mean it’s the right choice for everyone. If you opt to be your LLC’s registered agent, be aware that your name and address will become public information.

As the registered agent for your LLC, it is important to receive and manage important legal documents and notices. If you are not well-versed in local laws and feel incapable of handling this paperwork, it may not be advisable to serve as your own agent, even if the intention is to cut costs.

Prior to becoming your LLC’s registered agent, it is advisable to thoroughly evaluate your choices and possibly seek advice from a lawyer or professional agency.

3. Get a Copy of Your State’s LLC Articles of Organization Form

To establish your Limited Liability Company (LLC) as a legal entity, you need to file a document with the state agency responsible for business filings in your state. This document is typically referred to as the articles of organization, although some states may have different names for it, such as certificate of formation. Every state has its own form that you can use, and you can find it on the same website where you conducted your business name research. Once you’ve filled out and submitted the necessary paperwork, your LLC will be recognized as a legal entity by the state government. It is important to note that each state has unique requirements and regulations when it comes to forming an LLC, so be sure to do thorough research before starting the process.

4. Prepare the LLC Articles of Organization Form

Each state has its own set of requirements and procedures for individuals seeking to establish an LLC. Essential details to be provided include:

• Your business name
• The address of your principal place of business
• The purpose of the business
• The way your LLC will be managed
• Contact information for the registered agent (and in some states, the agent’s signature)
• The duration of the LLC

After these steps have been finished, the form will need to be signed by one or more business owners or organizers.

Certain states, like Nebraska and New York, mandate the publication of a notice in the newspaper declaring your intention to register your LLC. This action must be taken prior to submitting the articles of organization.

5. File the Articles of Organization

Submitting your articles of organization to the state is a crucial step when starting a new business. It’s important to carefully review them for any errors or inconsistencies that could cause issues during the registration process. Moreover, each state has its own filing fee for forming a business, so it’s essential to research the specific costs in the state where you plan to operate.By taking care of these details beforehand, you can ensure a smooth and efficient registration process for your new business. Additionally, it’s worth noting that some states may require additional documentation or information as part of the registration process. Therefore, it’s essential to stay up-to-date with all the requirements and regulations in your state to avoid any unnecessary delays or complications. Proper planning and attention to detail can go a long way in ensuring a successful start for your new business venture.

Once your formation documents get approved, you will receive a certificate from the state, indicating that your LLC is registered. This certificate can be used for various tasks including setting up a business bank account and obtaining a tax ID number. It is important to keep this document safe as it serves as proof of your LLC’s legal existence. Obtaining a tax ID number is crucial for businesses as it allows them to pay taxes, open business accounts, and hire employees. Opening a business bank account is also essential as it helps keep personal and business finances separate, making accounting much easier.

6. Create an Operating Agreement

An operating agreement is a crucial document that outlines the financial, legal, and management rights of all members in an LLC. It covers important details such as profit distribution, member exit strategies, and capital contributions. Essentially, it should contain all relevant information related to the operations of your LLC. Having a well-drafted operating agreement can help avoid disputes among members and provide clear guidelines for decision-making processes. Additionally, it can also help protect the personal assets of LLC members by establishing the separation between business and personal finances. It is highly recommended for all LLCs to have a comprehensive operating agreement in place to ensure smooth operations and prevent potential legal issues down the line.

Several states do not mandate an operating agreement, but it is still important to create one. LLCs with multiple members should establish an agreement to ensure alignment on rights and responsibilities. Even sole business owners can benefit from documenting the details.

Creating an operating agreement can be a viable option for single-member LLCs, especially with the abundance of free templates available online. However, for more intricate situations such as LLCs with multiple owners, it may be worthwhile to invest in hiring a skilled attorney. The cost of legal assistance is worth considering since an attorney can ensure that the operating agreement is tailored to your specific needs and covers all necessary bases. Furthermore, they can provide guidance on legal issues and potential conflicts that may arise in the future. Ultimately, seeking professional help can save you time and money in the long run by avoiding costly mistakes and disputes.

7. Keep Your LLC Active

Forming an LLC is just the beginning of your business journey. It is crucial to ensure that your business remains in good standing with your state after it’s formed. You can refer to your state’s business filing website for the latest information on how to do so. Most states require LLCs to file an annual report that updates information about the company and pay a yearly filing fee. Failing to comply with these requirements can lead to penalties, fines, or even dissolution of the LLC. Therefore, it is essential to stay up-to-date with your state’s regulations and keep your LLC in good standing.

Other Important Tasks When Creating an LLC

Starting an LLC requires more than just filing paperwork. To ensure the success of your new entity, you need to address some crucial details. One such aspect is obtaining the necessary licenses and permits required to operate your business in your state or locality. This may involve acquiring a business license, zoning permit, and tax registration.Another critical consideration is having a clear understanding of your financials, which includes creating a budget and setting up a separate bank account for all business transactions. Additionally, it’s recommended that you have an operating agreement in place that outlines the ownership structure and management responsibilities of your LLC.

By paying attention to these details and taking the necessary steps, you can increase your chances of success as a new business owner. It is also important to remember that starting an LLC requires time, effort, and dedication. You should be willing to put in the hard work required to establish a strong foundation for your business. Keep these factors in mind when starting an LLC, and you will be on the right track towards building a successful enterprise.

Obtain Business Licenses and Permits

When establishing an LLC, it’s important to keep in mind that apart from the necessary documents, you may also need to complete forms and pay fees related to business licenses and permits. The relevant information is usually available on the official website or in the same office where you obtained your LLC establishment documents. Business forms and fee schedules are typically listed together, making it easier for entrepreneurs to access this information. It is essential to follow all legal requirements related to business licenses and permits to ensure compliance with local and state regulations.

It is crucial for businesses to confirm the types of licenses and fees required to operate legally within their state. It is also important to be aware of any deadlines for license or permit renewal, as failing to meet these requirements could result in the loss of your LLC’s status as a legally recognized business. Obtaining the necessary licenses and permits can vary depending on the type of business and its location, so it is essential to research and understand the specific requirements for your industry. Additionally, keeping track of renewal deadlines and ensuring compliance with all regulations can help avoid legal penalties and maintain your business’s credibility.

Get an Employer Identification Number (EIN)

An Employer Identification Number (EIN) is a crucial step when starting an LLC. It enables you to separate your personal finances from your business finances and assets, making it easier to manage your company’s finances. In addition, banks typically require an EIN when opening a business account for your LLC. Moreover, in certain cases, obtaining an EIN is mandatory for businesses.It’s essential to apply for an EIN right after establishing your new company to avoid legal issues in the future. Obtaining an EIN is a simple process that can be completed online through the Internal Revenue Service (IRS) website. You will need to provide basic information about yourself and your business, including your business name, address, and tax classification. Once you have obtained an EIN, make sure to keep it safe and secure as it will be required for tax purposes. With an EIN in hand, you can focus on growing and developing your business without worrying about financial management issues.

Divide Business and Personal Assets

When you’re starting a business, it’s important to separate your personal assets from those that belong to your company. There are several steps you can take to do this. One of the first things you should do is apply for an Employer Identification Number (EIN) from the Internal Revenue Service. This unique number identifies your business for tax purposes and helps distinguish it from your personal finances. Additionally, opening a business bank account is another crucial step in separating your personal assets from those of your company. By having a dedicated account for your business, you can keep track of expenses and income more easily, and it also adds a layer of protection to your personal assets in case of legal issues or financial trouble with the business.

One of the main concerns among LLC owners and members is how to pay themselves. The most common method is through withdrawals from the business account associated with their LLC, which must be labeled as an “owner’s draw.” This enables entrepreneurs to view themselves as employees paid by their company, thus avoiding potential issues that may arise from using company funds for personal expenses. It is important to note that while these withdrawals are not subject to payroll taxes, they are still subject to income tax. Furthermore, it is advisable to consult a tax professional or accountant to ensure compliance with state and federal tax laws when determining how much and when to pay oneself.

Register Your Business in Other States

Registering your business in multiple states is possible, and you can choose to establish your domestic or in-state entity in a state different from where you reside. Furthermore, setting up a foreign or out-of-state entity is also an option if you have a registered agent within that state. This means that you can expand your business’s reach beyond its original location and tap into new markets by registering in different states. However, it is important to note that each state has its own laws and regulations regarding business registration, so it is essential to research and comply with the requirements of each state where you want to register your business.

To set up a foreign LLC, the first step is to establish your business in a state other than where it was originally incorporated. Suppose you incorporated your LLC in Delaware but plan to operate in Texas. In that case, you must submit an Application for Registration of a Foreign Limited Liability Company or Form 304 to the Texas Secretary of State. Along with this application, you may also have to provide a certificate of good standing and additional documentation to register your business in other states successfully. It’s important to note that each state may have its requirements and regulations for foreign LLC registration, so it’s crucial to familiarize yourself with them before proceeding with the process.

Take a look at our guides below for information on how to establish an LLC in certain states.

Why Form an LLC?

LLCs are a favored option for individuals and teams seeking to embark on a promising new business endeavor. Some common reasons for establishing LLCs are:

• Low startup cost: Frequently, setting up and operating a limited liability company is more cost-effective compared to a corporation. In certain states, the expenses are under $100. LLCs are a suitable business framework for individuals looking to initiate a company without significant financial investment.
• Tax-related benefits: LLCs have the unique ability to be considered pass-through entities for personal tax purposes, while also allowing for the separation of business assets from personal finances. This option is often preferred by LLC owners to prevent double taxation. Additionally, LLCs can be classified as a sole proprietorship, partnership, C-corporation, or S-corporation for tax reasons. Explore the tax advantages of LLCs for more information.
• Liability shielding: Running an LLC provides members and owners with liability protection, as the name suggests. For example, properly designating the business’s assets can protect members’ assets in the event of a lawsuit against the company.

Forming an LLC is not excessively complex. There are also companies available to help with documentation and handle yearly obligations such as annual reports on your behalf.

Types of LLCs To Consider

To begin an LLC, it’s important to consider the various types of LLCs available to ensure that you choose a business model that suits your company’s nature and intended operations. These LLC structures comprise:

• Single-member LLC: This LLC is owned and operated by a single person. While similar to a sole proprietorship, this LLC provides additional tax benefits and liability shielding.
• Multi-member LLC: Standard LLCs with more than one member, often divided into manager-managed or member-managed entities.
• L3C: These entities, also known as “low-profit liability companies,” act as a bridge between nonprofit LLCs and for-profit LLCs where the business cause remains the primary focus rather than earnings.
• Series LLC: Series LLCs are tiered business structures where the topmost LLC owns a series of lower-tiered LLCs through limitless segregation. Each LLC in the series operates mostly independently of one another; their assets are also primarily separated.
• PLLC: A specialized LLC, this business formation type is only available to certain licensed professionals.
• Restricted LLC: Restricted LLCs are not taxed during the first 10 years of formation. Likewise, they cannot make distributions to members. It must be stated in the articles of organization that the LLC will be restricted.

Uncommon: Anonymous LLC

This type of entity does not have a legal designation. If the state does not publicly identify its owner, an LLC is considered “anonymous.” Business formation details are generally public, but some individuals may wish to keep their information private. For example, a single-member LLC owner may operate from home but prefer to keep this information private.

While LLCs are a popular choice for business owners due to their limited liability protection and pass-through taxation, not all states allow for anonymous formation of LLCs. Currently, only four states – Delaware, Nevada, New Mexico, and Wyoming – offer this option. This means that in most states, the personal information of the LLC’s members must be disclosed in public records. It is important to research and understand the laws in your state before forming an LLC to ensure compliance with all legal requirements.

How Much Does an LLC Cost?

The cost of forming an LLC can vary significantly depending on the state where it is established. While some states may charge as little as $40 for filing the necessary paperwork, others could charge up to $500. It’s important to note that there may be additional costs associated with forming an LLC, such as reserving a business name or expediting the process. Furthermore, you may be required to purchase business licenses or permits specific to your LLC’s industry or location. It’s best to research the requirements and costs associated with forming an LLC in your state before proceeding with the process.

When calculating the cost of an LLC, it’s important to take into account more than just the initial formation paperwork. Additional expenses can include annual obligations like registered agent fees and annual reports. These expenses can vary depending on the state where the LLC is formed and may increase over time as the business grows. It’s crucial to factor in these costs when budgeting for your LLC to avoid any unexpected financial surprises down the road.

LLC vs. Other Business Types

While many entrepreneurs and aspiring business owners prefer limited liability companies for their cost-effectiveness, other business types may also be worth considering. Sole proprietorships, partnerships, and corporations are some of the common options available, each with its own advantages and drawbacks. Sole proprietorships are relatively easy to set up and manage but come with unlimited personal liability. Partnerships can offer shared responsibilities and profits but require clear agreements and communication between partners. Corporations offer liability protection and potential tax benefits but require more formalities and expenses. The choice of business type ultimately depends on your specific needs, goals, and circumstances. Consulting with a professional can help you make an informed decision that aligns with your vision for your business.

Sole Proprietorship

A sole proprietorship is the most basic way to operate a business. It involves an individual conducting business without creating a formal organization. You can operate as a sole proprietor using your own name or a chosen pseudonym, but if you choose the latter, you will need to file “doing business as” or DBA paperwork with the state, county, and sometimes local government.

The individual who owns a sole proprietorship declares business income and profits on their personal tax filings. They should expect to cover a self-employment tax of 15.3% starting in 2023. Unlike LLCs, sole proprietors bear all risks and do not have liability protection. They also do not have the option to operate as a pass-through entity or a corporation. While a sole proprietorship may be a good initial choice for an individual, they may want to consider forming a single-member LLC later on.

Partnership

When two or more individuals come together to create a for-profit company, they form a partnership. There are three options for partnership structure: general partnership, limited partnership, and limited liability partnership.

In a general partnership, all individuals have full control and equally unrestricted liability. This is in contrast to a limited partnership, where one member takes full control of daily activities while others have restricted control and liability. In an LLP, every partner has restricted liability. Similar to a partnership, you and your partner or partners may operate under a DBA after completing the required paperwork, although some states may mandate partnership registration.

A partnership is not subject to income tax since it operates as a “pass-through” entity. This means that during tax season, each partner declares their portion of the earnings and losses on their individual tax returns.

Corporation

In the United States, it is possible to establish and run C, S, B, and closed corporations, depending on the options available in each state. Although LLCs offer greater flexibility, corporate structures are comparatively more inflexible.

C-Corporations

A C-corporation, also known as a C-corp, is the most common type of this business structure. It is acknowledged as an independent entity for tax purposes and offers some level of protection from liability, similar to an LLC.

Individuals who own a corporation are referred to as shareholders, and their ownership stake is determined by the percentage of company shares they possess.

S-Corporations

S-corp and C-corp businesses differ mainly in their tax treatment. Unlike a regular corporation, an S-corp is considered a “pass-through” entity and is not subject to federal income taxes. Instead, S-corp shareholders are taxed on an individual basis. This allows shareholders to offset profits with losses from other sources.

B-Corporations

Recently, an increasing number of businesses have opted to function as B-corporations. Becoming a B-corp involves obtaining certification from an eligible third party or recognition at the state level for their capacity to generate positive social impact, often in terms of employment, the local community, or the environment.

B-corps differentiate themselves from other corporations by their mission and purpose; those responsible for these entities prioritize their ethical and transparent operation. In certain states, B-corps are required to submit yearly benefit reports showcasing their contributions to the public good in order to retain their status.

Closed Corporations

Closed corporations differ from publicly traded companies as they are operated by a private group of shareholders and do not adhere to the standard corporate structure. This setup provides owners with increased decision-making control and limited liability protection, although it may result in restricted access to capital. Closed corporations are commonly favored by smaller businesses and family-owned companies seeking greater flexibility and command over their business operations, offering an alternative to conventional corporate frameworks.

Nonprofit Organization

Nonprofit organizations are entities that operate for purposes other than profit-making, and no part of their earnings may be distributed to members, officers, or directors. These organizations can take various legal forms, such as nonprofit corporations or partnerships. Nonprofits serve a wide range of causes and interests, including religious institutions, public schools, political organizations, volunteer services, and labor unions. These organizations play an essential role in society by providing valuable services to communities and promoting social welfare. Additionally, they often receive tax exemptions from the government as a recognition of their charitable efforts. It is important to note that nonprofits still need to generate revenue to sustain their operations; however, any surplus funds are reinvested back into the organization’s mission rather than being distributed as profits to individuals.

While tax exemption status is one of the most well-known benefits of operating a nonprofit organization, it comes with specific requirements that must be met. Failure to adhere to these requirements can result in the loss of this status. For instance, according to the IRS, a nonprofit can lose its tax-exempt status if it actively pursues private income or engages in political lobbying activities. Therefore, maintaining tax-exemption requires constant diligence and adherence to regulations that govern the operation of nonprofits. It is crucial for organizations to keep up-to-date on the latest laws and guidelines so they can continue to serve their mission without any legal repercussions. Furthermore, nonprofits should also have an experienced legal team in place who can provide guidance on compliance issues and ensure that they stay on track with their obligations.

Cooperative

Cooperatives, commonly referred to as co-ops, are businesses that are owned and managed by the people who use their services to fulfill their needs. They operate in various industries such as insurance, credit, healthcare, telephone, electric, housing, transportation, child care and utility. Farmers also use cooperatives to market and process their crops and livestock. This business model is based on the principles of democratic control and shared ownership among members. Members have a say in how the co-op is run and share in its profits. The cooperative model has been successful in providing affordable goods and services while promoting community development and empowerment. It offers an alternative to traditional corporate structures that prioritize profit over people.

The United States Department of Agriculture reports that more than 30,000 cooperatives are currently in operation within the country, generating over $650 billion annually. These cooperatives exist in a variety of industries, from agriculture to finance and beyond. The cooperative business model is based on the principles of democratic control and shared ownership, with members working together to achieve common goals and share in the benefits. Cooperatives play an important role in supporting local communities and promoting economic development by empowering individuals and businesses to work together towards mutual success.

Although cooperatives are recognized as non-profit organizations, they are not exempt from taxes. They are subject to various types of taxes such as real property tax, sales tax, employment tax, and personal property tax. Additionally, they have to pay taxes related to unemployment compensation, workers’ compensation, and utility services. Despite being taxed similarly to other businesses, cooperatives continue to exist due to their unique business model and the benefits they offer to their members.

How Is an LLC Taxed?

When it comes to taxation, how an LLC is taxed depends on the state in which it operates and how its owner elects its tax status. As a pass-through entity, the LLC is claimed on personal taxes. However, if it chooses to be taxed as a partnership or corporation, there may be additional taxes to consider. It’s also important to note that 15 states have franchise taxes that can impact LLC owners. Understanding the tax implications of your business structure is essential for making informed financial decisions and avoiding any penalties or legal issues. Seeking professional advice from a tax expert can help ensure compliance and maximize tax savings opportunities.

When starting an LLC, it is crucial to understand your tax obligations as paying taxes is essential for maintaining the legality and good standing of your business. Depending on the structure of your LLC, you may be taxed as a sole proprietorship, partnership, S Corporation, or C Corporation. It’s important to determine which tax classification best suits your business needs and seek advice from a tax professional if needed. Additionally, staying organized with bookkeeping and record-keeping can help simplify the tax filing process and ensure compliance with all necessary regulations.

How To Start An LLC in 2024: Frequently Asked Questions

Do I need an LLC for my business?

The outcome will be based entirely on the specific requirements of your small business. If you work as a freelancer or solopreneur, a basic sole proprietorship may suffice.

However, an LLC provides several benefits, including safeguarding individuals from the legal and financial issues that their company might encounter. LLCs also have greater flexibility in terms of taxation. It is important to conduct thorough research and seek legal and tax guidance before establishing any type of business.

Is it possible to set up an LLC for free?

While the cost to register an LLC varies by state, there is a fee to register in every state. So, while there are some companies that advertise “free” LLC formation, what this means is that the company will fill out the LLC paperwork for you for free. But again, you will still be responsible for the state’s filing fee.

How long does it take to get an LLC?

If filed online, it may be possible to get your LLC formed in two to four business days. Otherwise, LLC papers submitted by mail often take two to several weeks to process.

Do I need a registered agent for an LLC?

While each LLC is required to have a registered agent, it is possible to act as your own agent or appoint an LLC member to the role. Otherwise, you may hire an individual or company to act as your agent.

Can I create a joint account with an LLC?

It is common for multi-member LLCs to open joint bank accounts to which all members have equal access.

How do I file taxes for an LLC?

LLCs classified as pass-through entities require the filing of business documents along with personal tax forms. If the LLC is classified as a corporation, additional paperwork will be necessary. For example, Form 8832 is required by the IRS for LLCs taxed as corporations.

What is an LLC operating agreement?

An LLC operating agreement is a document that determines business and financial decisions and key member roles. Some states require operating agreements before approving an LLC’s formation.

Can an LLC own another LLC?

An LLC can own another LLC, and there are multiple ways to make this happen. When filing paperwork, a preexisting LLC may be deemed the owner of the new LLC. Alternatively, an LLC member may sell the entity to someone else. A series LLC is a tiered business structure where the topmost LLC owns the other lower-tiered businesses

Can an LLC be a nonprofit?

An LLC can be a nonprofit, provided it meets the requirements laid out within the state. Registering an L3C, or “low profit” LLC, may also be possible in some locations.

What’s the difference between an LLC and a corporation?

An LLC is owned by members, while shareholders own corporations. Corporations are often subject to additional taxes, while LLCs may be claimed on one’s personal tax documents.

Can I have multiple businesses under one LLC?

It may be possible to have multiple businesses under one LLC if you set up the first entity as a holding company, after which future LLC ventures are held under the first LLC.

Can a trust own an LLC?

Yes, a trust can own an LLC. For instance, the trust can be named as a member in the articles of organization.

Do I need a DBA for my LLC?

Most LLCs do not require a DBA (doing business as). An exception would be foreign LLCs that cannot use their original name within a state, as another company has already registered it. In that case, the company would need a DBA to operate.

Do I need a physical address for my LLC?

An LLC isn’t legally required to have a physical address except for its registered agent, who accepts important documents such as tax papers or legal notices on behalf of the business.