Starting an LLC business isn’t exactly the most complicated matter at hand. There are a lot of organizations that provides assistance in how to start your own LLC business. However, they may or may not guide you thoroughly in starting your own LLC business. Having said that, here is a quick step-by-step guide on how to create an LLC for your business.
Step 1 – Naming your own LLC business company
This is the most basic step in starting your own LLC business company. Every business does that. Choose a company name that best suit your LLC business. When you are done with choosing the best name, make sure that you find out if it plagiarizes anyone’s business name too. You can check that online via business directories on LLC businesses’ pages.
If it clashes or sounds almost like another business owners’ company name, just rename your business and re-submit your application again.
Step 2 – Choose a state
This step is inter-changeable with step 1. Anyway. As soon as you haven chosen a name for your LLC business and decided to go with it, your next step is to choose the state you wish to start your company in.
Mind you, each state has different rules to opening a new company in it. Some states tend to have softer rules and approach to starting new LLC businesses. Just as each state has different fees charged when you choose to open a new business in their state.
Some states, for example, may charge more and some others may charge less. This may be due to the fact that some states have cheaper fees because business income and profit in those states may not be much. That’s why to encourage more economic growth in the state, it offers a cheaper admin fee.
The basic “admin fee” is just one of the fees that you have to pay for. You will also have to pay for government fees across any state you choose to start your business in. Again, the government fee may differ from state to state. It depends on which state you choose to open your business in. Each state has a different government fee charged. Again, this may due to certain factors that influence the fees.
Step 3 – Choose or look for a registered agent
A registered agent is a very important person for your company. A registered agent not just prepare your legal documents for you, they can also advise and explain a lot of legal business matters for you.
Sometimes, you will need to attend court and other legal matters. You may not be around in person to attend these legal court hearings. However, your registered agent is able to represent you in court on your behalf. That means if you are away from state or in another country and are not able to attend the legal hearings, then you can get your registered agent to represent you on your behalf. You don’t need to come back in the middle of your trip just for a court hearing.
At the same time, a registered agent can also handle the legal documents for you on your behalf. You can do that on your own but it’s a lot easier and more convenient to get a registered agent to do it for you instead.
We will also advise against being your own registered agent for privacy matters. A registered agent usually have their contacts and addresses listed publicly. Everyone in the public has access to their contact details wherever they get their hands on and whenever too. To make things easier consider using an LLC Formation service. You will save a lot of time.
Step 4 – Establish an LLC operating agreement
This is more internal than external. After you have more or less set up your own LLC business, you can start an operating agreement within your company. Do you plan to have a partner (or several) on board of your company? If yes, you can discuss and lay down what each members can and not get in the company. You may lay down the groundworks the shares, payments, nature of business, etc., about the business between your partners.
Step 5 – Tax and regulatory requirements
After you have settled more or less everything on the list, your next most important thing to settle is to handle the tax and regulatory side of the business. Without a doubt, every business will need you to have these things:
EIN: An IRS employer identification number to have your company taxed as a proper corporation instead of as a sole proprietorship. You do not want to taxed as a business on a personal level it can easily affect you financially.
Business license: This license is obtainable in the state you choose to do your business in. Without this business license you are not allowed to operate your business as freely as you should. Having said that, check with your LLC business registration center to get your business license.
Sales and employer taxes: Sometimes you will have to collect taxes on behalf of your employees and help them pay taxes. You will also need to pay taxes on your end too. Just check with your state again to see if you need it.
Above are the basic step-by-step guide in how to start your own LLC business. Remember to keep in mind that every state has different set of laws in how to start your own LLC businesses. Just remember to check with your states’ respective LLC corporation centers.
Interesting Related Article: “The Best States to Form an LLC in the US“