How to Form an LLC: A Step-by-Step Guide


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Want to form an LLC and run your own business but don’t know where to start?

You are in the right place. I have helped many budding entrepreneurs establish their legal business entities in the U.S. and get their businesses up and running.

In this article, I am going to tell you the step-by-step process you need to follow to form an LLC. But before moving on to the steps, let me quickly brief you about what an LLC is and why you should form one.

Table of Contents

Why Should You Form an LLC in the First Place?

5 Steps to Form an LLC and Start Operating Your Business

1. Choose a Name for Your LLC

2. Decide on Your LLC Member Roles

3. Find a Registered Agent for Your LLC

4. Register Your LLC with the State

5. Obtain a Federal Employer Identification Number (EIN)

Are You Ready to Set Up and Run Your LLC?

Why Should You Form an LLC in the First Place?

An LLC or a Limited Liability Company is one of the most common entity types formed by startup and small business owners due to the flexibility it offers.

Forming an LLC allows you to:

  • Protect your personal assets from lenders, banks, and other creditors. They can’t pursue your savings accounts, homes, and other personal assets to pay off company debts.
  • Form and operate your LLC with minimal compliance unlike in the case of forming a Corporation.
  • Manage your LLC efficiently by opting for either a member-managed or a manager-managed organizational structure.

Establishing and running an LLC is indeed the easiest way to start your business as an individual, freelancer, consultant, startup owner, or a small business owner. That’s why most entrepreneurs choose LLCs as their business structure.

Should we move on to the process to follow to start an LLC?

Read on to find out.

5 Steps to Form an LLC and Start Operating Your Business

You are just five steps away from starting your own business. Let’s get started.

1. Choose a Name for Your LLC

First things first, choose a name for your business that is relevant to your niche, unique, recognizable, and easy to read, write, and pronounce.

You should also ensure that the domain name and social media account handles are available for your business name. This is important because you’ll be taking your business online sooner or later.

Some other important LLC naming guidelines include:

  • Your full business name should include “Limited Liability Company” or “LLC.”
  • You can’t include words such as “FBI” and “State Department” because they can cause people to confuse your LLC with a government organization.
  • Your business name can’t imply a false or illegal purpose.
  • It should not be offensive.

You should also conduct trademark research to figure out if your selected LLC name is available. If so, apply for a trademark.

2. Decide on Your LLC Member Roles

You can either start an LLC on your own or with other members. When starting out, you need to clearly define the roles and responsibilities of each LLC member.

At the same time, you also need to choose a management structure for your LLC.

Do you want to run a member-managed LLC where all members will play active roles in decision-making? Or, do you want only an appointed manager to decide for everyone with a manager-managed LLC?

You need to create an LLC Operating Agreement, which clearly defines the financial and working relationships among LLC members.

3. Find a Registered Agent for Your LLC

After this, you need to choose a Registered Agent for your LLC who will send and receive legal papers on your behalf from the Secretary of State’s office.

The person you choose needs to be a resident of the state you’re forming an LLC in. You’ll need to provide their physical street address so that they can receive all important business documents.

4. Register Your LLC with the State

You need to register your LLC with the State you’re forming it in. Each U.S. state has its own requirements for LLC formation and business operations.

To create an LLC, you will have to file your LLC formation document with the state. This document is commonly called the Articles of Organization. However, in some states, it is also referred to as the Certificate of Formation.

You need to fill out a form to ensure compliance with the state’s LLC formation laws and pay state filing fees. And then wait for the application to process.

An easier way to do all of this important yet boring paperwork is to choose the LLC formation package offered by GovDocFiling. With one simplified application, you can be done with state filings and benefit from expedited processing.

It is much easier than doing it manually and much cheaper than having a lawyer or accountant file them for you.

5. Obtain a Federal Employer Identification Number (EIN)

You will also have to obtain a Federal Employer Identification Number (EIN) from the IRS. This unique nine-digit Tax ID helps the state determine the tax obligations of your LLC.

Applying for an EIN can take time and frustration dealing with the IRS. But the good part is that the GovDocFiling package I talked about in the previous point includes EIN filing as well.

Are You Ready to Set Up and Run Your LLC?

This step-by-step guide can help you complete the application process to form an LLC and get authorized to operate your business.

You can then focus on the other aspects of running a business such as developing your business website, bookkeeping, and marketing.

If you need help forming an LLC, feel free to check out the LLC formations packages offered by GovDocFiling. For other questions, you can connect with me in the comments below.