The LLC Guide
Corporate Compliance by Local Corporate Guides®
LLCs are created at the state level in the US. The general process is the same in every state. We recommend working through this starting an LLC guide to understand the general concept and then choosing a state to see the state specific process to actually file, create, and start your LLC.
LLCs are the most common and easiest form of business in the US to start, run, and manage.
Starting an LLC - Now What?
What is an LLC?
An LLC is a business structure much like a corporation—but with more flexibility regarding management and taxes. Like a corporation, an LLC is formed at the state level and has limited liability. This means that the debts and assets of the LLC belong to the LLC, not you. So if the business is sued, damages are usually limited to the LLC’s assets (not your house or car).
When it comes to taxes, LLCs are typically taxed like partnerships or sole proprietorships (but can elect to be taxed like a corporation). LLCs can also self-manage, much like a partnership (but can choose to appoint managers to operate more like a corporation).
The desire to maximize business advantages led to the creation of the LLC, a relatively new business structure. Learn more about all the Benefits of an LLC.
Starting an LLC
Before you can form an LLC, you’ll need to find the perfect business name—and make sure it’s not already taken. Fortunately, every state has an online database where you can search for available names. In every state, except for Alabama, you do not need to reserve the LLC name prior to filing the Articles of Organization.
Check your name’s availability in your state with a free Business Name Search.
If someone had to notify your business of a lawsuit, who would they speak to? Where would they go? To ensure these questions never go unanswered, your LLC will need to designate a registered agent to receive service of process (lawsuits) and official mail. Your agent must be available during normal business hours at a physical address in the state where you’re forming an LLC.
Everything you need to know about designating a Registered Agent.
Types of LLCs
Who’s going to be calling the shots and running the show—members or managers? The owners of your LLC are called members. Members can manage the LLC directly, or you can appoint or hire managers instead. While many LLCs are member-managed, managers can come in handy if you don’t run the day-to-day operations of your business. Also, most states require LLCs to list either members or managers on public documents (such as annual reports), so many LLCs appoint managers to help maintain member privacy.
Learn more about LLC Members and Managers.
Curious about whether or not you can form an LLC as a nonprofit? Wonder if a close LLC is a good choice for your business? Want to learn more about forming a series LLC? How about filing for an S-corp election? Check out our articles on these topics:
Articles of Organization
Now that you’ve made the big decisions, it’s time to file the form. This form—most commonly called the Articles of Organization—is filed with an agency in the state where you want to form an LLC. In most states, LLC formation documents are processed by the Secretary of State. You can either write your own Articles of Organization (uncommon) or fill out the state’s paper or online form (much more common). Requirements vary, but at minimum, you’ll need to include your LLC’s name, your registered agent, and a signature.
We offer a free template for your LLC Articles of Organization. Want the particulars—forms, filing times, fees—for your state? Select your state from our drop-down above or the map below.
After starting an LLC, you’ll likely need an Employer Identification Number (EIN). An EIN is like a social security number for your LLC. Every LLC that will pay taxes or hire employees needs an EIN. Apply for an EIN with the IRS by filing Form SS-4. You can apply online on the IRS website. It should only take a few minutes.
Everything you need to know about getting an EIN.
Operating agreements are the documents that outline how an LLC operates. How the LLC distributes its profits and losses, who owns what percentage of the company, how management structure is defined, everything—it’s all in the operating agreement. Your operating agreement is not filed with any state agency when forming an LLC; it’s an internal document. However, it’s not something you want to be operating an LLC without.
LLC Bank Account
To maintain your new LLC’s limited liability, you’ll need to keep your personal assets separate from business assets—so you’ll want to open a business bank account. Opening an account typically requires a few key business documents: your Articles of Organization, operating agreement, EIN, and (occasionally) an LLC resolution to open a bank account.
Make sure you have everything you need. We offer a free LLC resolution to open an LLC Bank Account.
LLC Funding & Assets
Your business bank account doesn’t do much good empty—your new LLC needs to be funded. Let’s say your LLC needs $10,000 to start. Each member would pony up a portion of that $10K from their personal money to put into the new business account. In exchange for that money consideration, members receive a proportionate percentage of membership interest. You can change the percentages at any time if people want to contribute more.
LLC Reporting Requirements
After you form an LLC, your state will still want you to check in every so often to update or confirm basic information about your LLC. These updates normally take the form of annual, biennial or periodic reports. Some states also require LLCs to file an initial report (a report due upon or shortly after starting your business).
Everything you need to know about your state’s LLC Reporting Requirements.
Business Licenses and Permits
Each state (and sometimes municipality) has specific business license requirements for certain trades. Depending upon the type of business you’re operating, you may need to obtain certain licenses and permits.
A good place to start checking for LLC licensing requirements is with state departments. Here’s contact information for your state’s Secretary of State and licensing agencies.
Expanding to New States
While you may start an LLC in one state, you may want to do business in other states as well. Operating an LLC in a different state requires some paperwork—typically an application for a Certificate of Authority. Overall, registering your out-of-state LLC (also called a “foreign LLC”) is a similar process to forming an LLC. You’ll need to pay a filing fee and appoint a registered agent in the new state.
Ready to Form an LLC?
To learn how to start an LLC in your state, click on the state name below. Or, to sign up for any of our services—from registered agent services to LLC formation—click “Get Started” now!