Have you always wanted to start your own LLC, but had no idea where to start?
If so, then this is the perfect guide for you!
Here, we’ve created a beginner’s guide that will briefly and clearly tell you how to start an LLC, so you can stay focused on your business for years to come.
Step One: Pick A Name
The first step in understanding how to start an LLC?
Picking and claiming the perfect name!
First, you’ll need to make sure that no one else has already claimed the name you’re interested in. Most states won’t allow for duplicate names or names that are too similar to an existing one.
Additionally, your home state likely has local laws when it comes to picking out a name. You can find out more about these local laws here.
Be sure to select a name that’s relevant to your business, easy to pronounce, and clearly separates you from other businesses in your industry. Remember that in most states, you’ll need to include the initials “LLC” in your business correspondence and official documents.
Once you’ve chosen your name, you can reserve and register it either at the time you file your articles of incorporation or before you create your LLC (this will once again depend on your state.)
Should You Trademark Your Name?
Once you’ve made the effort to select the name of your dreams, it’s generally a good idea to have it registered as a trademark. This way, no one can steal your name and your intellectual property will be protected.
To start the trademarking process, you can go to the U.S. Patent & Trademark Office’s website.
Step 2: Start Setting Up Your LLC
It’s time to start making some decisions about the overall operations of your LLC.
When it comes to who is in charge of your company, there are two possibilities.
The first is called a “member-managed LLC.” This means that everyone who owns the LLC also manages it. This is the most popular option because most people who start their LLC want to be in charge of it!
If you’re the only member of your LLC, and also want to serve as its manager, good news! Depending on your state, you might not even need to file any articles of incorporation.
The second management option is called a “manager-managed LLC.” This is when those that don’t own the LLC are in charge of running it. As the LLC owner, of course, you decide who manages your LLC in this option.
Step 3: Filing Articles Of Incorporation
Once you’ve decided on a management style, it’s time to file your articles of incorporation! These need to be filed with your state’s specific secretary of state.
You will need to provide your LLC’s name, the legal address of your business, the purpose of your business, and who will help to manage and own your LLC. You’ll also need to provide an outline of the basic structure of your business.
Of course, you’ll have to pay a fee when you file! Luckily, it’s only between $100-$300.
At this time, you’ll also have to select who will be the “registered agent” of your LLC. This means that you need to pick a foreign or domestic company – other than your own LLC, of course! This entity will need to be registered to legally do business in your state and is usually a partner of your LLC.
Step 4: Get Your Business License
What’s the next thing you’ll need to do when you want to know how to start an LLC?
Apply for and receive your business license! Though the specific license requirements will vary based on the state in which you live and do business, there are a few more general things you can expect.
You’ll likely need to get additional licenses that vary based on the type of business you’re planning to run. This can be things like liquor licenses, licenses from the health department, and more.
The Chamber Of Commerce in your specific city will also be able to give you additional information about the fees, overall application process, and kinds of licensing you may need to have.
If you’re lucky, you might even be able to both get and renew your business license on the Internet!
Step 5: Get Right With The IRS
Next, it’s time to apply for your own Employee Identification Number (EIN,) through the IRS. This will ensure that your employees’ taxes are handled and filed properly.
Even if you are the only person in your LLC, you’ll still need to get an EIN. Keep in mind that if you’re only working with independent contractors, you won’t need an EIN.
If you’re your LLC’s only employee, you can apply for your EIN online through the IRS’s website.
Once you have your EIN, you’ll be able to open your LLC’s official bank account! Select your bank carefully, and always ask about the different account options available to you.
Step 6: Draw Up Your Operating Agreement
This is the final, and also one of the most important, steps of how to start an LLC.
(Of course, if you’re the only person in your LLC, you won’t need to complete this step.)
Even if you’re in a state that doesn’t legally require you to have an operating agreement, it’s still a smart idea. This agreement will help you to ensure you keep your status as an LLC, will help you outline in writing your financial and management plans, and will help you to set out rules for operation.
You Know How To Start An LLC
Thanks to this quick guide, you now know the basics of what it takes to start your own LLC.
Though there initially might be a bit of work involved, it’s always worth it in the end!
Looking for more advice on how to start your own business? Want to make sure things keep running smoothly?
Check out the website and blog for more invaluable advice!