How Long Does It Take To Form An LLC: Everything You Need to Know
If you want to know how long it takes to form an LLC, you’ll want to be familiar with the process of establishing an LLC, while also understanding that rules differ by state. 3 min read
2. LLC Processing Time
3. Expedited Processing
4. Forming Your LLC
Updated October 28, 2020:
How Long Does It Take to Form an LLC
If you want to know how long it takes to form an LLC, you’ll want to be familiar with the process of establishing an LLC, while also understanding that rules differ by state. An LLC, also referred to as a Limited Liability Company, consists of members (the owners) who generally manage and oversee the daily operations of the LLC. Certain states provide rules and regulations regarding the LLC and member obligations.
Even if you establish an LLC, it can be structured similar to a corporation in terms of limited liability, while also operating similarly to a partnership in terms of taxation. Keep in mind that states provide varying statutes in terms of the LLC’s formation, registration, and other requirements.
LLC Processing Time
The LLC processing time really depends on the state in which you form your LLC. However, it usually takes most states 7-10 business days; other states could take 4-6 weeks, i.e. Arizona takes roughly 22-27 business days to process your documents. Some states issue an approval immediately after receiving the articles of organization, in which the turnaround time can be as little as 3 business days. It also depends on the time of year in which you choose to form your LLC. Some states find themselves busier during certain times of the year, which could cause a delay in the formation of your LLC. For that reason, be sure to plan accordingly so that you are aware of the time it could take to form your LLC before you can begin conducting business in that state.
If you want to request expedited or rush processing, you can do so by paying an additional fee. Again, it depends on the state as to how much the additional fee will be, but requesting expedited processing can reduce the process by up to 10 business days.
If you do request expedited processing, your application will be reviewed ahead of others. Furthermore, once the Secretary of State’s office is done with its review, the results will be overnighted to you. Keep in mind that your LLC will not automatically obtain approval. For example, if you are missing the required documentation, or if your business name doesn’t meet the state’s requirements, your LLC will be denied.
Some examples of expedited filing by the state include:
• Delaware, which offers a variety of expedited service options for additional fees, i.e. next-day processing is available for an additional $50, same-day processing is available for an additional $100, two-hour processing is available for an additional $500, and one-hour processing is available for an additional $1,000 fee.
• Arizona generally has a processing time of 22-27 business days. However, if requesting an expedited review, the processing time will be around 7-12 business days for an additional $35 fee.
Forming Your LLC
While you want to know how long it will take to form your LLC, you’ll also need to know the step necessary in order to begin conducting business through your LLC. In addition to choosing your business name (one that is available for use and not being used by anyone else), you’ll need to file the articles of organization. This is the document that is sent to the Secretary of State for processing and approval. The document itself includes various information regarding the business, including member names/dates of birth/addresses, registered agent name/address, the purpose of the business, and signatures of the members and agent.
After you have completed and submitted the articles of organization, it is beneficial to draft an operating agreement. Not all states require this document, but it is helpful to have one, as it will be a legally binding document that specifies the decision-making process and other important operations of the business, i.e. business and financial management decisions.
You will also be required to obtain an Employer Identification Number (EIN). This is the number that the IRS will provide you with for business purposes. This number is required in order to open business bank accounts, business credit cards, and create a payroll system for employees.
You might also need to obtain licensing and permits depending on the type of industry in which you operate. You’ll want to be sure to review the state and local jurisdictional business laws for such information.
If you need help learning about the time it takes to form your LLC, or if you need help forming your LLC, 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.