Knowing how to apply for an LLC is the next required step after you've decided that a limited liability company, an entity with one or more members, is the right choice for your business. This business structure has the advantageous pass-through tax structure of a partnership as well as the limited personal liability offered by a corporation. You can even choose to be taxed as an S corporation. This flexibility is one of the reasons an LLC is one of the most popular American business entities.

The LLC Application Process

Although the process for establishing an LLC varies by the state where you form your new business, the basic steps are the same. In most states, you can easily apply for your LLC online or by mailing in the necessary paper forms. This is the general procedure that new LLCs need to follow in most states, though you should confirm the process with the secretary of state's office:

  • Select a name for your LLC that establishes a strong identity for your brand. The name must include the words "limited liability company or the abbreviations "LLC" or "L.L.C." Most states restrict certain words from being used in the name of an LLC, such as "insurance" or "bank."
  • After you have chosen a name, search the database that the U.S. Patent and Trademark Office maintains to make sure another business has not already trademarked the name. You should also make sure another business within your state is not already using the name in question, either. In most states, your business name will automatically be registered when you file the articles of organization.
  • Filing this organization paperwork is the next step in creating an LLC. In most states, you can download blank forms online and provide information such as the name and address of the business and of each of its members. The filing fee for articles of organization varies by state. Typically, it costs less than $300 and can be done either by yourself or with the assistance of a business attorney.
  • Designate a registered agent, a person or a business that agrees to receive legal papers on behalf of your business. This can be one of the LLC members, an attorney, or a professional service.
  • Create an operating agreement that outlines the process for making important business decisions. These include the voting rights and responsibilities, the ownership percentages for each member, the transfer of membership interest, and each member's duties. While most states do not require an LLC operating agreement, it still makes sense to put these procedures in writing to avoid future conflicts.
  • Some states require you to publish a notification about your new LLC in the local paper, as designated by the secretary of state. The cost to publish will vary, depending on the requirements of the notification.
  • After your LLC is registered, you will need to get business licenses and permits, as required by your state and municipality. These requirements also vary by the industry.
  • You must establish a separate bank account for your LLC to separate business funds from your personal funds.
  • You may need to request an employer identification number (EIN) from the IRS for federal tax purposes. This is a free service that can be completed online. This nine-digit number is similar to a Social Security number for your business.
  • If your LLC will be doing business in states other than the one where you established your company, you will need to register your business in the states in question, too. Check with each secretary of state's office for the specific requirements you will need to perform to register your business.

LLC Responsible Party

A responsible party for your LLC is anyone who can control the business's assets and its funds. That party has either direct or indirect control for the management of the entity. An LLC that has multiple members must designate a single representative as the responsible party. He or she is required to obtain the federal tax ID number. If you have a single-member LLC, you are the responsible party by default.

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