Limited Liability Companies (LLC) provide business owners with liability protections and offer them flexibility in taxation and management. LLCs are a good way to organize a business.
Starting an LLC is not as difficult as one thinks. Many small business owners have benefited from it. It allows them to protect their assets by operating their businesses with different structures. However, here is a simple step-by-step guide on how to start an LLC:
Choose a name and register it
There are several laws regarding choosing a name in an LLC. Firstly, the name must be different from other registered names. It is important to search for business names that are available on the business filings website. Make sure your LLC name meets the specific state requirements.
Choose a registered agent
The purpose of a registered agent is to receive legal documents on behalf of an LLC. The registered agent must have a physical address or company authorized to provide registered agent services in the state. There are many advantages when using a professional registered agency, like privacy protection, flexibility, advice, assistance with complaints, and ensuring that all requirements are met. You can be a registered agent, as the case may be.
Preparing an LLC Operating Agreement
An operating agreement outlines how a business will be managed and governed. The agreement should outline the responsibilities and powers of members and managers. Meanwhile, the benefit of operating agreements helps to avoid conflicts among members, personal protection of liabilities and personal assets, and so on.
File Articles of Organization
Filing articles of organization is an important part of creating an LLC. This article includes name, address, purpose and duration, management, either member or manager, name and address of registered agent, and signature. When your LLC is approved, you will receive a certificate that your LLC is ready.
Get EIN and bank account
Once your LLC is officially ready, you can apply for EIN, i.e., employer identification number, which is a nine-digit number. For federal taxes, EIN helps you get identified. It is important for tax filing, opening a bank account for business, and hiring workers. You can use your bank account for all business costs, income and expenses. Mind you, keeping business and personal finances is not good.
Obtain business licenses and permits
To operate a business freely or legally, you may need a license or permit. The type of business you do will determine the permit that needs to be obtained. Find out more about business permits and licenses for your business.
Get tax advice and file any requirements
Also, filing annual reports and staying informed on other requirements makes your LLC outstanding. More so, there are so many beautiful benefits when you have an LLC, and following these steps, then you are making the best decision.
Conclusion
The best part of starting an LLC is that it makes potential investors take you seriously. Finally, an LLC is not so much of a hassle if you follow the right steps.