As a business structure, a limited liability company or an LLC is relatively new to the legal market, at least as compared to a corporation that has been tried and tested within decades. At the same time, though, when it comes to business formation, LLCs are by far the most popular entity type for now. And for a good reason. Smartly combining limited liability protection of the corporation with a straightforward and simple managerial structure of a sole proprietorship, this business form has gained a lot of fans and looks very attractive to many new entrepreneurs planning to start their business and seeking to do that in the easiest way.
How to set up an LLC company you wonder? According to the https://bestllcservices.co/ website, basically, you have three ways to go. The first one is a DIY route where you’ll do all the work on your own. The second method is to hire an attorney who will complete business incorporation taking into account your specific needs and situation. And the third one is to delegate the whole process to one of the LLC formation services that offer professional help at reasonable prices. Yet, before you decide which method will best suit you, let’s take a close look at the LLC formation process.
LLC Formation Stages
To give you an idea of what is waiting for you on the way of business formation and let you understand the process of launching an LLC from within, we’ve made a quick guide on steps you need to take to register an LLC in the US. While LLC law varies by state, a general scheme is pretty much the same nationwide.
Pick a Name for Your Company
No limited liability company in the US can exist without a name. Your LLC company name should be unique and different from any already registered business name. To check the versions you invent, you need to do the name search, which is normally available on the best LLC service online platforms for free as well as on the state government websites. A unique LLC name ensures legal protection for your company ownership and trademark rights.
Find a Registered Agent
LLC incorporation in the United States calls for the obligatory designation of the registered agent in the state of business formation. The registered agent’s role is to serve as an intermediary between your LLC company and the state authorities for communication purposes. In other words, a registered agent should receive any correspondence meant for your LLC and transfer it to you in a timely manner. For this reason, this agent should be either an adult person over 18 years old or a business entity physically located in the state of your business formation. Notably, nearly all online LLC formation services provide registered agent service in each and every state.
Draft an Operating Agreement
Though not a must-have for LLC formation, an Operating Agreement is an essential internal document that will help regulate and maintain good relationships between the company co-owners by outlining their rights and liabilities, profit and losses distribution, voting rights, and ownership interests. This way, you’ll minimize any conflicts inside your LLC company and enhance its credibility in the eyes of third parties.
File Your LLC Formation Documents
In most states, to make your venture legally existent, you just need to file the Articles of Organization with the Secretary of State. It’s a typical document that contains basic info about your firm such as the names and addresses of the business organizers and managers, the purpose and term of your LLC company, as well as the registered agent data. You can find the Articles of Organization templates online and some of the best LLC services also have them in free access.
Receive a State Registration Certificate
Once your Articles of Organization are approved and registered with the state, the state normally issues a certificate or some sort of document proving your LLC company is eligible and diligently established under the state laws. You’ll need this document for many other after-formation activities.
File With Other States
This step is optional and needed only if you plan to run your business in other US states. In this case, you’ll have to pass the same LLC formation procedures in all other target states.
Steps to Take After LLC Formation
By registering your company with the state, you finalize the formal part of your business formation. However, there are some other steps you need to take to keep your newly-formed company up and running and maintain its operation in full compliance with the state rules and regulations.
- Obtain an EIN: An Employer Identification Number or EIN is an important identifier issued by the IRS your LLC company will need for tax purposes and opening a bank account;
- Set up a Business Bank Account: Your LLC is a separate legal entity, so using your personal bank account for business is not right. By opening a business bank account after an LLC formation, you’ll further enhance the limited liability protection and conveniently split your personal and business finances for accounting purposes;
- Get the Licenses and Permits: Some states have licensing obligations while in other states, licenses and special permissions are optional and depend on the type of your business operations. Anyway, after the business incorporation, it’s better to check whether you need any added permits to stay in good standing with the state and lawfully run your business. Noteworthy, many LLC formation services deliver licensing services too.
LLC Services: Are They a Good Alternative?
At this point, we can get back to the issue of what is the easiest way to form an LLC. In fact, an LLC company is by far the easiest business structure to form. So, if you have time and are confident enough, you can pass through business formation on your own. Besides, it’s a good option if you have a limited budget and want to save on hiring an expensive attorney. Yet another worthy alternative is LLC formation services that hit a sweet spot between a DIY route and costly lawyer’s services. The best LLC services come up with professional aid that won’t cost you a fortune. Such LLC websites as LegalZoom, Rocketlawyer, or Mycompanyworks offer a whole range of services to form an LLC in a quick and lawful manner and even maintain your LLC compliance afterward.
Conclusion
Is it difficult to form an LLC? By and large, the process is not as difficult as it might seem. And the best thing is that you have a choice. You can either do it yourself or ask for some help. And if the latter sounds like you, LLC formation services are an optimal alternative to go for.