• Skip to primary navigation
  • Skip to main content
  • Skip to primary sidebar
  • Skip to footer

Legal Templates

Legal Templates
  • Business Forms
    • Business Formation
      • LLC Operating Agreement
      • Articles of Incorporation
      • Shareholder Agreement
      • Partnership Agreement
      • Business Purchase Agreement
      • Joint Venture Agreement
      • Single-Member LLC Operating Agreement
    • Business Operations
      • Letter of Intent
      • Non-Disclosure Agreement (NDA)
      • Non-Compete Agreement
      • Invoice Template
      • Purchase Order
      • Hold Harmless Agreement
      • Release of Liability Form (Waiver)
      • Buy-Sell Agreement
      • Construction Contract
      • Licensing Agreement
    • Employment
      • Independent Contractor Agreement
      • Employment Contract
      • Freelance Contract
      • Leave of Absence Letter
      • Leave of Absence Agreement
    • Cease and Desist Letter
      • Copyright Infringement
      • Debt Collection
      • Defamation
      • Harassment
      • Trademark Infringement
  • Real Estate Forms
    • Lease Agreements
      • Lease/Rental Agreement
      • Sublease Agreement
      • Room Rental Agreement
      • Month-to-Month Lease Agreement
      • Commercial Lease Agreement
      • Short Term Lease Agreement
      • Land Lease Agreement
      • Lease Renewal Agreement
      • Lease Amendment
    • Lease Termination Letter
      • Eviction Notice
      • Notice to Vacate
      • Early Lease Termination Letter
      • Late Rent Notice
    • Deeds & Property
      • Warranty Deed
      • Mortgage Deed
      • Quitclaim Deed
      • Deed of Trust
      • Mechanic’s Lien
      • Property Management Agreement
    • Rental Application
    • Real Estate Purchase Agreement
    • Employment Verification Letter
  • Estate Planning Forms
    • Power of Attorney
      • Medical Power of Attorney
      • Durable Power of Attorney
      • Revocation of Power of Attorney
    • Wills
      • Living Will
      • Last Will and Testament
      • Codicil to Will
    • Advance Directive
    • Living Trust
    • DNR Form
  • Finance Forms
    • Loans
      • Promissory Note
      • Loan Agreement
      • IOU
      • Demand For Payment Letter
    • Bill of Sale
      • Vehicle Bill of Sale
      • Boat Bill of Sale
      • Firearm Bill of Sale
      • Horse Bill of Sale
      • Trailer Bill of Sale
    • Sales & Purchases
      • Sales Agreement
      • Purchase Agreement
      • Gift Affidavit
      • Stock Purchase Agreement
  • Personal/Family Forms
    • Affidavits
      • Affidavit of Death
      • Affidavit of Domicile
      • Affidavit of Heirship
      • Affidavit of Identity
      • Affidavit of Residence
      • Affidavit of Service
      • Affidavit of Title
      • Financial Affidavit
      • Gift Affidavit
      • Small Estate Affidavit
    • Marriage
      • Divorce Agreement
      • Prenuptial Agreement
      • Cohabitation Agreement
      • Separation Agreement
      • Postnuptial Agreement Template
    • Child & Pet Forms
      • Child Medical Consent
      • Child Travel Consent Form
      • Child Custody Agreement
      • Pet Care Agreement
    • Medical Records Release Form
  • Resources
    • Legal Dictionary
    • All Legal Documents
    • Article Categories
      • Business
      • Estate Planning
      • Financial
      • Personal & Family
      • Real Estate
  • Help
    • Email Us
    • Contact Us
    • About Us
  • Sign In
  • :email
    • Dashboard Home
    • My Account
    • My Billing History
    • Sign Out
  • Help
    • Contact Us
    • Email Us
    • About Us
    • (855) 335-9779 Monday-Friday, 10AM - 6PM EDT
  • Sign In
  • :email
    • Dashboard Home
    • My Account
    • My Billing History
    • Sign Out

Home Resources Business How to Form an LLC

How to Form an LLC

Samuel Johns

Published December 31, 2019 | Written by Samuel Johns

Interested in setting up an LLC (limited liability company)? We’ll show you to create an LLC, so you can protect your personal assets and solidify your business.

There are many benefits of forming an LLC. For example, you can report an LLC’s profits and losses on your personal taxes rather than filing a separate business tax statement.

How to Start an LLC

The process for starting an LLC varies by state, but is generally straightforward.

1. Research where starting an LLC is best for you

If you’re a small business owner, you may have heard that starting an LLC in business-friendly states like Delaware and Wyoming is a good idea.

However, this isn’t necessarily the case for your business.

For instance, if you’re a small business owner, you should register your LLC in the state where your business operates because that’s where you’ll be paying taxes anyway. Furthermore, if you’re a licensed professional, some states may require you start a PLLC instead of an LLC.

There are two main reasons you should be wary of starting an LLC in a different state. First, if you register in another state, you have to find and appoint a registered agent in that state.

A registered agent must be an individual or organization residing in that state, so you’ll need to pay them for their services. This extra expense makes it a less appealing option for small business owners.

You’ll also be required to register your out-of-state LLC in your home state as a “foreign LLC.” That means you’ll end up paying two sets of state filing fees, as well as annual filing fees (an annual fee is $800 in California, and varies by state).

2. Name your LLC

The next decision you’ll need to make is what to name your LLC. Here are a few things to consider before landing on a name and sticking to it:

First, most states require you to end your LLC’s name with “LLC”, “L.L.C.”, “Limited Liability Company”, or some other legally permissible variation.

Second, you must pick a unique name, otherwise you may infringe on another LLC’s copyright. Some states (like California) have online tools that let you check whether an LLC name is available. You can check the US Patent and Trademark Office too.

Third, you can’t pick a name that might confuse people about what your company does (such as “Bank” or “Insurance Company”) or what it is (you can’t call an LLC a “Corporation” or “Corp.” as corporations and LLCs are entirely different types of businesses).

You should also consider:

  • Whether the domain name is still available online for your chosen LLC name. For example, if you want to call your LLC “Monster Digital Content, L.L.C.,” is monsterdigitalcontent.com still available, or will you have to settle for a less exact URL?
  • Whether your chosen name might limit future expansion. For instance, if you call yourself “Louisville Tree Surgeons LLC” because you’re setting up an LLC in Louisville, KY, what happens if you want to expand your business to Frankfort, KY?

3. Choose a registered agent

LLC filing rules in each state require you to name a registered agent for your LLC.

The registered agent is responsible for receiving legal documents such as a court summons, as well as filing other documents, like tax reports.

Your LLC’s registered agent must reside in the state your LLC is registered in, and can be an individual or organization.

If you open LLCs in several states, you’ll need a different registered agent in each state, since they have to legally reside there.

If you register LLCs in several states, you could seek the services of specialized registered agent companies that have a presence in all 50 states (and Washington, D.C.) to save time and money.

4. File Articles of Organization

Forming an LLC requires you to file your LLC’s articles of organization. Articles of organization are the legal documents necessary for becoming an LLC, according to the laws of your state.

You can obtain your articles of organization from the Secretary of State department in your state, many of which provide standard, fill-in-the-blank templates for your convenience.

Filling out the articles of organization is straightforward. You’ll usually need to provide the name of the LLC, its registered address, and the names of its owners, and you’ll have to name your registered agent too.

Your articles of organization should then be submitted to the Secretary of State’s office. Depending on your state, you may be able to file online — otherwise, you’ll have to send the physical documents by mail.

It’s at this point that you’ll need to pay the filing fee. The amount depends on your state, but the average is $135, with Massachusetts charging the highest filing fee to form an LLC ($500) and Kentucky charging just $40.

5. Draft an LLC Operating Agreement

Creating an LLC operating agreement is an essential part of LLC formation, despite not being required by most state’s laws.

An operating agreement functions in a way similar to corporate bylaws. Specifically, it sets out the rules for how the LLC operates, including:

  • How it will be managed (member-managed vs manager-managed llc)
  • How voting will work
  • Each member’s rights and responsibilities
  • Each member’s percentage of ownership
  • What happens if a member wants to sell their share, dies, or is incapacitated
  • How much money (capital) each member is contributing to the LLC
  • What share of the profits each member will receive
  • How new members can join the LLC, and how departing members can leave

You don’t legally need an attorney to read over your operating agreement, but you should if you have the resources.

You can also alter the terms of your agreement in the future (if necessary) by using an LLC operating agreement amendment.

6. Obtain an Employer Identification Number

An employer identification number (EIN) is like a social security number for a business. Obtaining one from the IRS is a key part of getting an LLC up and running.

You’ll need your EIN when you hire employees, file your tax returns, and open business bank accounts.

The IRS lets you apply for an EIN online.

7. Gather necessary business licenses

You may need to apply for a business license from your state before your business begins operating. Since many states allow cities and counties to regulate businesses, you may also need a license from this level of government too.

For example, Napa, California businesses must apply for a license to operate. Certain businesses in this city must apply for a special license, including ice cream vendors, fortune tellers, and businesses that use a set of scales.

In particular, if you’re selling alcohol or firearms, you’ll need to obtain the proper licenses from the federal government as well as the state and city governments where you’ll be doing business.

8. Set up an LLC bank account

Once you have your EIN and articles of organization, you’ll be able to open a business bank account.

It’s vital to open an LLC bank account to keep your personal assets separate from your business assets. One of the advantages of obtaining an LLC is protecting your personal assets in case of legal action against your business.

By making it clear what belongs to your company, the courts can’t deprive you of your personal assets.

When you create an LLC business bank account, you’ll also need to specify who can sign checks on the LLC’s behalf.

How to Get Your LLC Registered

Creating an LLC is a straight forward, eight-step process.

  1. Decide which state to set up your LLC in
  2. Pick an appropriate name
  3. Name the owners and a registered agent
  4. File the articles of organization with your secretary of state
  5. Draft an operating agreement
  6. Obtain an EIN
  7. Apply for the relevant licenses
  8. Set up a bank account

Now that you’re ready to form an LLC of your own, make sure you understand how LLCs are taxed.

Samuel Johns

Samuel Johns

Staff Writer

Samuel Johns is a staff writer at Legal Templates. His background in providing constituent services to an elected representative motivates him to help make legal documents more accessible and easy...

Related Articles

  • How To Successfully Start a Nonprofit Business in 6 Steps
  • Trade Name Registration (DBA) – Everything You Need to Know
  • Benefits of an LLC: Advantages and Disadvantages Explained
  • Texas LLC: 8 Steps for Forming an LLC in Texas
  • How Are Limited Liability Companies (LLCs) Taxed?

In This Article

  • How to Start an LLC
  • How to Get Your LLC Registered

Free LLC Operating Agreement

Use our free LLC operating agreement to identify your business as a limited liability company and establish how it will operate.

Get Started

Legal Documents

  • All Legal Forms
  • Bill of Sale Forms
  • Quitclaim Deed
  • Cease and Desist
  • Last Will and Testament
  • Articles of Incorporation

Popular Forms

  • Lease Agreements
  • Power of Attorney Forms
  • Eviction Notice
  • Living Will
  • Non-Disclosure Agreement

Resources

  • Legal Dictionary
  • Business
  • Estate Planning
  • Financial
  • Personal & Family
  • Real Estate

Company

  • Home
  • Pricing
  • Blog
  • About Us
  • Contact Us
  • Partner With Us

Users

  • Account
  • Terms of Use
  • Privacy Policy
  • Do Not Sell My Personal Information
  • Cookie Preferences
McAfee - Together is power.
Trustpilot
BBB Accredited Business

(855) 335-9779, Monday-Friday, 10AM - 6PM EDT

Facebook Twitter LinkedIn

Copyright 2021 Legal Templates LLC. Legal Templates LLC is not a lawyer, or a law firm and does not engage in the practice of law. Legal Templates cannot and does not provide legal advice or legal representation. All information, software and services provided on the site are for informational purposes and self-help only and are not intended to be a substitute for a lawyer or professional legal advice. Use of this site is subject to our Terms of Use.

Thank you for downloading one of our free legal templates!

Leave us a review?

We hope you've found what you need and are able to avoid the time, costs, and stress associated with dealing with a lawyer.

If you have a moment, a review would mean the world to us (it only takes about 15 seconds).

Thanks again, and good luck!

Leave My Review