How do I get my LLC license? A license for a Limited Liability Company (LLC) is obtained easily through the state in which a business owner plans to conduct business. Once the LLC is legally formed under state law, it is licensed to do business there.

What Is an LLC?

LLCs offer the liability protection of a corporation with the pass-through taxation of a partnership or sole proprietorship. Basically, this business entity structure takes some of the best qualities of other entity types and puts them into one. Owners of an LLC are protected from any liabilities if the company goes under or gets into legal trouble. Taxes for an LLC are only paid once on the personal income tax returns of its members and not at the company level.

Getting an LLC License

The requirements and regulations vary by state because LLCs are formed under State laws. Usually, a business owner can find out the specific requirements for LLCs in their state by visiting the Secretary of State website or a business division of the State. There are some requirements that are the same no matter which state you decide on for your business.

These basic requirements include:

  • Choosing a completely unique name for the LLC (no other active business in the same state can share your chosen name)
  • Filing a certificate of formation (also called articles of organization, formation documents, articles of incorporation, etc.) with the State
  • Choosing a registered agent
  • Payment of a filing fee

Getting an LLC license by filing with the State, allows the business to be treated as its own entity, separate from its owners. This means that the business itself can own property, take out loans, form contracts, and incur legal action without involving its owners in any liabilities.

If a company wants to be allowed to conduct business in any states outside of the state in which it is registered, it will need to file as a foreign LLC in each of the states it hopes to do business. Filing as a foreign LLC in a state is frequently easier to do than getting a domestic LLC license in a state.

To file as a foreign LLC in most states you'll need to:

Choosing an LLC Name

All states require LLCs to choose unique names, so to find out whether your desired name is available for use, you'll need to visit the Secretary of State website and perform a business name search.

Other name requirements include:

  • Adding some form of the words Limited Liability Company or their abbreviation to the name
  • Not violating any trademarks of other businesses
  • Not using any restricted words which depend on the state in which the business is formed

Once you've decided on your LLC's name and checked to be sure that it's available for use, you'll want to reserve it. Most states allow business owners to reserve names for a fee to ensure that another company won't take the name while the LLC is getting its filing documents in order.

Filing a Certificate of Formation

The certificate of formation can be found on your Secretary of State website. They will usually provide business owners with a template or worksheet that you'll simply need to fill out with your business's details.

Usually, the following information is required in the certificate of formation:

  • LLC name and address
  • Member names
  • Information for the registered agent

You'll also need to pay a filing fee, which differs from state to state. Some states charge as low as $50 and some as high as $500.&

Forming an Operating Agreement

Not every state requires an operating agreement, but it's always a good idea to write one. These documents lay out the plans for the company as well as the rights and responsibilities of the LLC's members.

LLC Dissolution

Dissolving an LLC is somewhat easy when the owners decide that they don't want to do business any longer or if they just want to change their business structure. Each state has certain requirements for dissolving an LLC which usually includes filling out the required forms and making creditors aware of the change.

If an LLC is dissolved with the state, it is not licensed to do business in the state anymore. If the company wants to continue to conduct business, they'll need to reorganize and file as another entity type.

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