A DIY LLC, also known as a “do-it-yourself” LLC, is easy and inexpensive to form. An LLC, or Limited Liability Company, consists of owners (members), and is a rather popular business structure, particularly due to the limited liability protection for its members.

While it is rather easy to form, the rules for establishing an LLC vary by state. Regardless of the state in which you choose to form your LLC, the basic requirements of establishing your LLC are the same.

Obtain a Copy of the Articles of Organization from the SOS Website

Some states refer to this document as the “certification of formation,” or the “certificate of organization.” You can find this document on the Secretary of State’s website in the state where you want to establish your business. When you obtain this document, you should also find out whether the state in which you choose to register your LLC requires you to post a notice in the newspaper with your business registration.

Pick Your Business Name

There are standard requirements when choosing your business name, and these include:

• You must choose a name that is available for use. You cannot use a name that is already being used by another LLC in that same state.

• The name must include the LLC designator, i.e., L.L.C., LLC, etc.

• The name cannot include prohibited terms, i.e., Bank, Insurance, etc.

Once you have chosen your business name, you can pay a fee to reserve the name for a period of time. This will also depend on the state in which you are reserving the name. Most states also don’t require that you register the name since the articles of organization will automatically register your business name once you file it.

Fill out the Articles of Organization

The articles of organization will need to include the business name, principal place of business, member names/addresses, and registered agent information. Keep in mind that you cannot use a P.O. Box as your address, nor can your registered agent use a P.O. Box. If you are forming a single-member LLC, you can use your home address as the principal place of business; some people choose not to use their home address, as that address will become public record.

Also included in the articles of organization is the management structure. Therefore, if you plan on hiring a third-party manager to oversee the daily operations of the business, then you will identify the manager. Furthermore, some multi-member LLCs choose a member to manage the LLC.

Publish a Notice in the Newspaper

This will depend on the state’s requirement. If the state does, in fact, require this, then you will need to publish a notice in the newspaper indicating that you intend on forming an LLC. You will then need to re-publish the notice several times over a period of weeks. Thereafter, you will submit an affidavit of publication to the Secretary of State’s office, which provides that you published the notice in the newspaper on certain dates.

After you’ve published the notice in the newspaper (if required), then you will submit the articles of organization and the appropriate fee to your Secretary of State’s office.

Draft an Operating Agreement

While most states don’t require this, you should still draft an operating agreement that lays out the important decisions of the business. This includes voting rights, member roles and responsibilities, the allocation of profits/losses, how the sale of a member’s interest will be handled, what happens if a member becomes disabled, incapacitated, or dies, along with other provisions that you deem necessary. Some states require that the operating agreement be in writing, i.e., Arkansas.

Obtain an EIN

You will need to obtain an EIN, also referred to as an Employer Identification Number, with the IRS. You will need this number in order to open a business account and hire employees. The form is free and can be submitted online on the IRS website.

Obtain Permits and Licenses

Depending on the industry in which you operate, you might need to obtain additional permits and licensing in order to conduct business. Be sure to find out what is required of you by visiting your Secretary of State’s website. Some examples of licensing can include a seller’s permit or zoning permit.

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