Starting a company in the United States is relatively easy, but that doesn’t make the process any less daunting. Forming an LLC can be extremely time-consuming, and if you don’t have the right help, it can take even longer. If you’re thinking about opening your own limited liability company but aren’t sure where to begin, follow these steps to get started quickly and easily.
A limited liability company (LLC) is a type of business organization that provides certain protections and benefits to the members and owners if the LLC is properly formed and maintained. Forming an LLC is not complicated, but the state’s requirements can vary. LLCs operate under state laws and regulations that generally define the rights and responsibilities of the LLC members and any restrictions on the LLC’s activities. States are divided into three types:
- Single-member LLCs, where the owner is the only person in the LLC.
- Multi-member LLCs, where multiple members are in the LLC.
- Limited liability partnerships (LLPs), where two or more members operate the LLC as a partnership.
Starting a business in the United States is a complicated and lengthy process. Before legally operating your business, you must register as a business entity. There are two key business entities in the United States: sole proprietorships and partnerships. An LLC, or Limited Liability Company, is a type of corporation, which means it’s a separate legal entity and must follow specific legal guidelines. An LLC allows its owners (or members) to enjoy pass-through taxation, which means the profits and losses of the business are passed through to the owners’ tax returns rather than taxed at the business level. Here are some easy steps on how to start an LLC in the USA:
Choose a Name for Your LLC
Nowadays, starting a limited liability company (LLC) is easier than ever, thanks to online tools and online services, but choosing a business name can seem daunting. Before registering your LLC, you need to come up with a reputation for it. But, before doing this, you must choose one that fits the following guidelines.
After deciding to open your LLC, you will need to find a legal name that is unique for your business. You also must determine the registered agent for your business, which is the individual or company authorized to accept legal documents for you. Once you have this done, you’ll need to open a bank account for your business. The bank account will help you keep your business’ finances separate from your personal finances. To open a bank account for your business, you will need to use your business’ legal name.
Reserve a Name (optional)
After choosing a business name, the next thing you’ll need to do is reserve a name. First, you’ll need to do a name search on the state website (which requires, at a minimum, a social security number, and date of birth). Typically, you will have 2-3 business days to send a name request and receive a response to your request, but sometimes states will allow 24-48 hours for name reservations.
Choose a Registered Agent
While starting a business in the US, you should also have the address of a registered agent. A registered agent is a person or business that can accept legal papers on behalf of another business. A registered agent must have a physical address inside the United States, accept legal service of process (i.e., mail), and be researchable. As such, it is a requirement by the IRS that every LLC has an address and a registered agent.
Prepare an LLC Operating Agreement
The LLC is the basic business structure that allows its owners to keep personal assets separate from those of the business. An LLC, or limited liability company, is registered with the state and must have a registered agent. Your LLC operating agreement is the legal document that states the rules and details of the LLC. If you are forming a business, then one of the first things you should do is prepare and file the operating agreement. The LLC Operating Agreement governs how the company will operate and sets forth the rights and responsibilities of members.
File Organizational Paperwork With the State
The first step in filing for an LLC is to gather all of your business’s information. You’ll need your business’s name and address, as well as your business’s Federal Tax ID number: EIN. You can do that online with the IRS. Once you have your EIN in hand, you’ll need to fill out an IRS form 8832 and submit it to the Small Business and Self-Employment Tax Center. For an LLC or Corporation to exist in the USA, it must meet certain requirements, including registering with the state and filing organizational paperwork.
Obtain a Certificate from the State
In order to start an LLC in the USA, you must first obtain a certificate from the Secretary of State of the state. LLC in the USA requires filing Articles of Organization, which does not require any fee. However, you must obtain a certificate of good standing from the state to avoid being present in default.
Register to Do Business in the Other States (optional)
Many people get confused about which state to register their LLC. (Limited Liability Company). There are 10 states officially requiring an LLC to be registered:
- New Hampshire
- New Jersey
Things to Keep in Mind
-Some of these states make registering an LLC very easy and inexpensive, while others require a state filing fee or multiple forms.
- Some states have no state fees but require you to register your LLC with the Secretary of State.
- Some states require you to register your LLC in the county where you reside.
- Some states require you to file some state forms and some county forms.
- Some states allow you to register your LLC online vs. over the phone.
- Some states require an LLC to maintain a registered agent, usually you.
- Some states allow you to incorporate for free.
- Some states exempt LLCs from another state’s filing requirement.
- Some states require you to submit a notarized signature.