1. Forming a Limited Liability Company (LLC) Overview
2. How to Apply for an LLC

Forming a Limited Liability Company (LLC) Overview

How to apply for an LLC is a common question among business owners. Applying for a limited liability company, which is a business structure that offers perks like pass-through taxes and limited liability, is a process that is both affordable and relatively easy. 

One of the primary benefits of LLCs is that the owners or managers do not have to use their personal assets to pay off the debts of the LLC. Managers are only responsible for an LLC's debt when it comes to their personal investments in the company. 

Many small business owners in the United States consider forming limited liability companies due to the protection these companies offer and the ease of the process of formation.

However, simply because limited liability companies are easier to form does not mean these companies are easier to run than other types of business structures.

There are many factors you should keep in mind when deciding whether to form a limited liability company. For example, if you want funding, many investors would rather work with a corporation than with a limited liability company. Also, different states have different laws pertaining to the formation of an LLC. Therefore, you should make sure you know the requirements of the state where your business will be operating. 

How to Apply for an LLC

The process of forming an LLC is not complex. However, there are a few steps the owner of a business will need to follow to make sure the LLC is formed properly.

The application process for LLCs is fairly simple. Many states allow business owners to file for an LLC online. Business owners can also take advantage of more traditional methods like filing the form by mail or in person. The filing fee can be as low as $100 or as high as $800.

The first step involves choosing a business name. It is essential that you spend a good amount of time brainstorming potential names for your LLC. 

The importance of selecting a good name for your business extends beyond marketing and business purposes. There are legal considerations that you also need to keep in mind when choosing a name for your new LLC.

Your proposed name for your LLC should include some type of indicator that your business is actually a limited liability company. Therefore, your proposed name needs to include a designation like "Limited Liability Company" or "LLC." You also cannot include words in your LLC's name that are restricted unless you get permission. Here are a few examples of words that tend to be restricted:

  • Bank
  • Insurance
  • Attorney

Be sure to check the list of restricted and prohibited words in your state to make sure you don't run into any trouble after filing your application. You should also conduct research to make sure the business name you proposed does not infringe on trademarks. Taking this step can save you a lot of time and frustration in the future. You can use the Trademark Electronic Search System to check for potential infringement.

TESS refers to a database of all the registered trademarks and pending trademark applications. The U.S. Patent and Trademark Office maintains this database. While it's not required that you do a search, it's a smart move. Conducting a search will allow you to see whether a trademark has been applied for or registered. Look for names that may be too similar to the name you're proposing for your LLC.

The next step involves checking the availability of the proposed name. You want to make sure the name isn't currently in use by another limited liability company in the state.

The business office of your state should be able to offer you with more information in terms of how you can figure out if your proposed business name is already in use by another LLC.

Your state may require that you temporarily reserve the proposed name if the name happens to be available. This will prevent another business owner from successfully filing with the name before you're able to file the application for the formation of an LLC. When you file the articles of organization in most states, you don't have to register the proposed name separately.

If you need help with how to apply for an 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.