1. LLC Basics
2. LLC State
3. LLC Name
4. LLC Formation Documents
5. LLC Operating Agreement

How do I get an LLC? It is fairly simple to form a Limited Liability Company (LLC) in any state. Starting with choosing a name and then registering with the state, you can have your LLC up and running in no time.

LLC Basics

LLCs are becoming increasingly popular with business owners as they offer the liability protection afforded to corporations but without double taxation. Business owners can enjoy protection from legal issues regarding their company and they can also benefit from the pass-through financial setup. The LLC itself is not taxed, but only the business income that is passed to the owners.

Entrepreneurs who want to make sure that their personal finances and business finances remain completely separate will choose an LLC structure. If the owners uphold the requirements for a legally-operating LLC, they will not be responsible for the debts of the business.

LLCs offer a few options for how the owners would like to be classified with the IRS. They can choose between:

  • Partnership
  • Corporation
  • Disregarded Entity

If the business owners choose to be classified as a corporation, they will need to follow additional requirements and will be subject to double taxation.

LLC State

The requirements for LLCs differ from state to state, so you'll first want to decide which state you would like to conduct business in to know where you want to form your LLC.

Business owners prefer to form LLCs in states like Delaware because they have developed their laws governing LLCs well, but the best place to form your LLC will be in the state that you plan to primarily operate. Some business owners plan to conduct business in multiple states in which case they will likely need to register in each state they do business in and pay the required fees.

LLC Name

Another important beginning step is choosing a name for your LLC. To be sure that you choose a unique name, you will need to do a business name search on the website of the Secretary of State within the state you've chosen for formation. Usually, states require all business names to be totally unique to avoid confusion, so you couldn't have a Sally's Pretzels, Inc. and a Sally's Pretzels, LLC within the same state.

You'll want to research the naming rules for your specific state before choosing a name. Frequently they require business owners to use a name that:

  • Includes some form of the words Limited Liability Company (can be abbreviated like LLC, L.L.C., etc.)
  • Does not use any words that could cause the business to be confused with a state or federal government agency like FBI, post office, etc.
  • Does not use words that could make customers think the LLC has licenses that it doesn't actually have like medical, dentist, etc.
  • Does not violate the trademarks of any other businesses

Many business owners also choose to check the availability of a domain name for their company for when they are ready to launch a company website.

Once your preferred name is chosen, you can put a hold on the name through the Secretary of State website, or their business division, for a fee. This will keep the name from being taken by another business owner while you're getting your formation documents together.

LLC Formation Documents

Next, you'll need to file your LLC's formation documents with the state. These documents go by a few different names, including:

  • Articles of organization
  • Articles of formation
  • Articles of incorporation
  • Certificate of formation
  • Certificate of organization

Most states require a filing fee (amounts differ depending on the state) for the formation of an LLC, but not for a sole proprietorship or partnership.

The documents should be short and straightforward informing the state of the basic information of your LLC. Many states offer a sort of worksheet where you can just fill in the blanks. Usually, they require the following information:

  • Business name
  • Business address
  • Duration of the LLC (if not continual)
  • Registered agent name and address
  • LLC purpose

LLC Operating Agreement

Most states do not require an LLC to form an operating agreement, but it is good business practice to do so anyway.

Operating agreements should clearly lay out the responsibilities, rights, and ownership percentages of all of the members of the LLC. &

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