Creating an LLC online, depending on your business size and location, is an easy process. Before you form an LLC, you should familiarize yourself with the documents you'll need to submit and whether the related taxes and fees make this type of business structure the best option for you.

Creating a Limited Liability Company

An LLC mixes some of the benefits of a sole proprietorship with the perks of a corporation. For example, an LLC can have several members, but unlike a corporation, only the individual owners of the LLC are taxed. This means you'll pay less in taxes than you would if you formed a corporation, since both a corporation and its individual members are taxed each year.

Naming Requirements

Check with the Secretary of State's office for specific rules about naming an LLC in your state. You can also expect to follow a few general rules:

  • Your LLC name must be unique and distinct from all other businesses registered in the state.
  • The name must end with “Limited Liability Company,” “LLC,” or “L.L.C.” to indicate the business type.
  • Since you're registering an LLC, you can't use words such as “Bank” or “Corporation.”

The U.S. Patent and Trademark Office maintains a database of all currently registered business names and other trademarked content. You can perform a free search to confirm that the name you want to use won't infringe on content that's already registered.

Other Requirements

Before you open your doors, your LLC will need to create its articles of organization. This document lists information such as your company's name and address, and it also lists the owners and their responsibilities. The rules for filing this document, which may also be known as a “certificate of formation” or “certificate of organization,” has unique filing rules based on the state where you register the LLC.

You'll also have to nominate a registered agent, also known as the “agent for service of process.” This individual is responsible for processing all legal correspondence related to your business. This person can be a member of your LLC, but you can also employ an outside specialist to handle this role.

You need to check whether your LLC requires additional local, state, or federal level permits or licenses as well. Although it's not legally required, a licensing agreement will help structure and run your LLC. This document includes more specific information about your LLC, such as each member's role and their responsibilities. You can refer to this document in the future if there is ever a disagreement about how your LLC should operate.

Finally, you need to get your employer identification number. This number, which you can get from the IRS' website, is used for banking and tax purposes related to your LLC. It takes 10 to 20 business days, depending on the state, to receive your LLC certificate of organization from your registered agent.

Fees and Forms

You'll have to pay a few fees when setting up your LLC, though prices vary in different states. In Kentucky, for example, it only costs $40 to register an LLC, but it costs $520 to register in Massachusetts. Check whether your state charges taxes and additional fees to run your LLC, and remember to account for these when you draft your business plan. Here are some other fees that may apply to you:

You can check the overview of your state's LLC fees at the Local Secretary of State office. Some states also require that you announce in a local newspaper that you've established your LLC. You then have to make periodic announcements in a local newspaper over the next few weeks.

Do You Need to Hire an Attorney to Form an LLC Online?

Though you don't have to hire an attorney to establish your LLC, doing so can ensure you don't miss any important steps and that you've secured all the necessary licenses and permits. Moreover, the cost associated with hiring an attorney and other consultants is deductible once you open your business.

An attorney can also offer recommendations about annual paperwork and administrative procedures that may help your enterprise. You aren't required to retain an attorney in order to form or operate an LLC, but he or she can help clarify document proceedings and preserve your status as an LLC.

If you need help with creating an LLC online, you can post your legal need on UpCounsel's marketplace. UpCounsel accepts only the top 5 percent of lawyers to its site. Lawyers on UpCounsel come from law schools such as Harvard Law and Yale Law and average 14 years of legal experience, including work with or on behalf of companies like Google, Menlo Ventures, and Airbnb.