Quick Guide On Setting Up A Limited Liability Company

Posted on June 14, 2017

Limited Liability Company or LLC is the most preferred legal structure for small businesses wanting to incorporate. The requirements may vary depending on your state, but forming an LLC is relatively a simple process, depending on your organizational structure.

This quick guide will walk you through every step to form an LLC.

  1. Choose your business name.

Your Secretary of State office’s LLC division has specific rules when it comes to naming your business. They have a list of prohibited terms such as Incorporated, Corporation, City, Insurance, and others. Your legal business name should end with an LLC designator like LLC, Limited Liability Company, etc. Most importantly, your business name must not be the same as another LLC in the same state you’re filing.

  1. Get a copy of the Articles of Organization form and fill it out.

Provide the LLC key components such as your business name, its purpose, your office address, names of the LLC members, as well as the registered agent who will receive any legal document. At this point, you don’t necessarily have to specify your ownership distribution and management structure. For most states, filing an LLC is done with the Secretary of State. However, other states will require you to process it through Department of Consumer and Regulatory Affairs, State Corporation Commission, Division of Corporations & Commercial Code, or through Department of Commerce and Consumer Affairs.

  1. Submit your Articles of Organization form.

Submit the form and pay the appropriate filing fee. Most filing fees cost around $100, with the lowest fee at around $40 in the state of Kentucky and the highest fee at $520 in the state of Massachusetts. Some states may also have a corporate tax which must be paid upon filing. In California for instance, they only have a $70 filing fee, but they have an annual tax of $800. Make sure to check your Secretary of State office to know your state’s LLC fees.

  1. Publish a notice in your local newspaper (For Arizona and New York only).

At present, the state of Arizona and New York requires that you publish your intention to form an LLC. This must be done before filing your Articles of Organization.

  1. Receive your LLC Certificate.

Depending on your state, you will receive your LLC Certificate within 10-20 business days through your registered agent.

  1. Apply for an Employer Identification Number (EIN).

An employer identification number (EIN) is like your Social Security number for your business. Your EIN allows you to make business transactions and hire employees.

  1. Create your Operating Agreement.

You should specify the details of your Operating Agreement document well in advance. While not necessarily required, the Operating Agreement is very important for every LLC. It establishes your LLC’s policies and operations, and it specifies the responsibilities and rights of its members.

Setting up an LLC is a great way to guarantee that your business assets are protected. Some people would prefer to hire an attorney for this, but if your organization isn’t that complex, you can take care of this yourself.


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