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How to Start an LLC in 5 Easy Steps

How to start an LLC in 5 easy steps. These simple and easy steps will help you get your LLC up and running in no time.

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Overview

Determine the business structure

A Limited Liability Company (LLC) is a business structure allowed by state statute. LLCs are popular because, similar to a corporation, they offer limited liability protection to their owners. Other features of LLCs include pass-through taxation and flexibility in corporate management. Here are 5 easy steps for how to start an LLC.

Determine the business structure
The first step is to determine the business structure. An LLC can be either member-managed or manager-managed. In a member-managed LLC, all the members (owners) participate in running the company. This is similar to a partnership. In a manager-managed LLC, there is usually one or more designated members who run the company, and the other members are passive investors. This is similar to a corporation with shareholders and a board of directors.

Select a name for the LLC
The next step is to select a name for your LLC that complies with your state’s naming requirements. Most states require that an LLC’s name contain the words “Limited Liability Company” or the abbreviations “L.L.C.” or “LLC.” It is also important to choose a name that is not already in use by another business entity in your state. You can check your state’s database of registered businesses to see if your desired name is available.

Register the LLC with the state
The third step is to register your LLC with the state in which you will be doing business. This is typically done by filing Articles of Organization with the Secretary of State’s office (or equivalent) in your state. The Articles of Organization must contain certain information about your LLC, such as its name, registered address, and names of its initial members (owners). Most states also require that you file a Certificate of Formation (or Certificate of Authority) when registering an out-of-state LLC doing business in their state.

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Create an Operating Agreement
The fourth step is to create an Operating Agreement for your LLC.� This document does not need to be filed with your state, but it is important to have one nonetheless because it sets forth how you will run your company on a day-to-day basis.� The Operating Agreement should cover topics such as how new members will join the company, how profits and losses will be allocated among members, and what happens if someone wants to leave the company.� It is best to have an attorney help you draft this agreement so that it meets all legal requirements in your state.�

Get an employer identification number
The fifth and final step is to obtain an employer identification number (EIN) from�the IRS.� You need this number even if you do not have any employees; it�is used for tax purposes.� To obtain an EIN online, visit�the IRS website�and click on “Employer ID Numbers (EINs).”

Choose a name for the LLC

Now that you understand the benefits of forming an LLC, it’s time to choose a name for your LLC. The name must end with “LLC,” “L.L.C.,” or “limited liability company.” You can reserve a name for your LLC with the state government agency that handles business filings.

File the Articles of Organization

To start your LLC, you must file articles of organization with your state’s LLC office. These articles are sometimes called a certificate of formation or certificate of organization. Your LLC’s articles of organization must include:
-the LLC’s name
-the LLC’s purpose
-the LLC’s registered agent
-the LLC’s duration
-the names of the LLC’s organizers
You may also need to file additional paperwork, depending on your state, such as forms related to your LLC’s name, purpose, and registered agent.

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Create an Operating Agreement

You will want to make sure that you have a written agreement between all members of the LLC detailing the ownership percentage, roles, and responsibilities of each member. This will help to prevent any misunderstandings in the future and will provide a clear understanding of each member’s role in the business.

If you do not have an operating agreement, your LLC will be governed by the state’s default rules for LLCs, which may not be what you had in mind when you formed your LLC.

Comply with other state requirements

In order to form an LLC in any state, you must first comply with that state’s requirements. While these vary from state to state, there are some general steps you’ll need to take:

1. Choose a business name for your LLC. This name must be distinguishable from any other business entity registered in your state. Typically, you can check your state’s business entity database online to see if your desired name is available.

2. Appoint a registered agent for your LLC. This is the person or company that will receive legal documents on behalf of your LLC. The registered agent must have a physical address in the state where you are forming your LLC and be available during normal business hours.

3. File the articles of organization with your state’s LLC filing office. These articles are also sometimes referred to as the Certificate of Formation or Certificate of Organization. The articles will include basic information about your LLC, such as the names of the members, the registered agent, and the LLC’s purpose.

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4. Comply with other state requirements. Depending on your state, there may be additional requirements for forming an LLC, such as obtaining a business license or permit. You should check with your Secretary of State or local county/city clerk’s office to find out what else you may need to do . . . And that’s it! Once you’ve taken these steps and paid the necessary filing fees, your LLC will be officially recognized by your state

Here's How To Create An LLC in Just Minutes!

*This applies to Virginia residents too!

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