So, you want to start a business? Your idea has been brewing for months now and you are ready to take the plunge and make it work. You feel excited, nervous, and probably confused and paralyzed by all the steps that stand between your dream business and reality.
LLC stands for Limited Liability Company, and can consist of more than one person. If you form an LLC you will safeguard yourself legally, and have more legitimacy for clients.
Grab a piece of paper and a pen and write down your LLC Business List; let’s take a look at how you can start, step by step, to minimize the distance between your dream business and reality.
Starting Your LLC Business List
1. Where: Choosing Your Location
Before you start to set up your LLC you need to determine where you will base your business: will it be online or a physical location? If you have physical premises what state will it be in?
The recommended place to register your LLC is in the state you reside in, however, if you plan to open a business in multiple states you will need to apply for a Foreign LLC in each state.
2. What: Choosing Your Business Name
The next step is choosing your business name, this is important for your business because it will make the first impression for your potential clients. Keep in mind that every state will have different rules about what names will be permissible, in addition to this, when you choose your name note the following:
- Your name will need to include the acronym ‘LLC’.
- Refrain from using words that will be similar to that of governmental institutions, for example, the State Department.
- If you use words (usually restricted) like University or Attorney, you will need to apply for the relevant paperwork and ensure that you are a licenced practitioner or partnered with a licenced practitioner.
3. Who: Choosing Your Registered Agent
When you register your LLC you will need to choose a Registered Agent, usually someone or a business that resides in your state or has authorization to deal with business in your state.
Your registered agent will assist with sending and receiving your legal paperwork, for example, correspondence that include legal summons or other important legal documents.
4. Files: Articles of Organization
A formation document, otherwise known as Articles of Organization, are forms that make your LLC official once you filed them with your state.
To file your Articles of Organization do the following:
- Download the Articles of Organization online (choose your state)
- Fill out the necessary requirements for the form (Business name, Registered Agent’s name and address, as well as the management structure of your LLC).
- When you file your Articles of Organization you will need to pay a certain fee (varies by state), notarize your documents, and file your documents by mail or online.
5. Operating Agreement: Roles and Ownership
An Operating Agreement is useful to have when you start your LLC (although not a necessary requirement); this is a document that stipulates the different roles within your LLC as well as ownership.
An operating agreement consists of the following:
- Management and Voting
- Capital Contributions
- Membership Changes
6. Employer Identification Number (EIN)
Your Employer Identification Number (EIN) will be a necessary part of your LLC because it will enable you to have a business bank account and hire employees. This number will secure you with the IRS and necessary tax reports for your business.
Ensure that you have your business name and the date your business started before you apply for your EIN.
Where to get an EIN: IRS website, mail, or fax.
Forming your LLC does not have to be a confusing process, and you are not alone during the process. If you would like more information visit TRUiC’s website for easy steps to follow in your LLC set-up.