Business

How Do I Form an LLC on My Own? Your Complete Guide

<p style&equals;"text-align&colon; justify&semi;">Are you thinking of <a href&equals;"https&colon;&sol;&sol;newsforpublic&period;com&sol;tips-starting-successful-ecommerce-business&sol;">starting your own business<&sol;a>&quest;<&sol;p>&NewLine;<p style&equals;"text-align&colon; justify&semi;">If so&comma; you should consider forming a Limited Liability Company&comma; or LLC&period; An LLC is a great option for small&comma; medium&comma; and large-sized businesses&period;<&sol;p>&NewLine;<p><a href&equals;"https&colon;&sol;&sol;shareasale&period;com&sol;r&period;cfm&quest;b&equals;1532639&amp&semi;u&equals;1359905&amp&semi;m&equals;19875&amp&semi;urllink&equals;&amp&semi;afftrack&equals;" target&equals;"&lowbar;blank" rel&equals;"noopener"><img class&equals;"aligncenter" src&equals;"https&colon;&sol;&sol;static&period;shareasale&period;com&sol;image&sol;19875&sol;FewClicks300x250&period;jpg" border&equals;"0" &sol;><&sol;a><&sol;p>&NewLine;<p style&equals;"text-align&colon; justify&semi;">There are minimal requirements to form an LLC and few obligations to run a company under this structure&period;<&sol;p>&NewLine;<p style&equals;"text-align&colon; justify&semi;">It&&num;8217&semi;s no wonder why it&&num;8217&semi;s one of the most popular business structures for many American businesses&period;<&sol;p>&NewLine;<p style&equals;"text-align&colon; justify&semi;">So how do you <a href&equals;"https&colon;&sol;&sol;newsforpublic&period;com&sol;form-llc-guide&sol;">form an LLC<&sol;a>&quest; What are the criteria for determining where to form your LLC&quest;<&sol;p>&NewLine;<p style&equals;"text-align&colon; justify&semi;">Here&&num;8217&semi;s what you need to know&colon;<&sol;p>&NewLine;<h2 style&equals;"text-align&colon; justify&semi;">Choose Your Company Name<&sol;h2>&NewLine;<hr &sol;>&NewLine;<p style&equals;"text-align&colon; justify&semi;">The first step is to choose a great name for your business&period; This can be the name of your brand or can be something unrelated&period;<&sol;p>&NewLine;<p style&equals;"text-align&colon; justify&semi;">For example&comma; if you&&num;8217&semi;re a freelancer named John Smith you can choose to name your business John Smith LLC&period; Or you can detach your name and called it ABC123 LLC if you wanted to&excl;<&sol;p>&NewLine;<p style&equals;"text-align&colon; justify&semi;">You have to check if the LLC name is already registered before you can register it&period; As such&comma; it&&num;8217&semi;s best to have a list of names to choose from&period;<&sol;p>&NewLine;<h2 style&equals;"text-align&colon; justify&semi;">Articles of Organization<&sol;h2>&NewLine;<hr &sol;>&NewLine;<p style&equals;"text-align&colon; justify&semi;">The next step is to file your Articles of Organization&period; These are documents that list the owners of your LLC and the style of governance&period;<&sol;p>&NewLine;<p style&equals;"text-align&colon; justify&semi;">They&&num;8217&semi;re also known as <em>Articles of Incorporation&comma; Certificate of Organization&comma; <&sol;em>or <em>Certificate of Formation <&sol;em>in some states&period;<&sol;p>&NewLine;<p style&equals;"text-align&colon; justify&semi;">The rules on how to create your Articles of Organization vary depending on your state&period; There will be different requirements of what you have to include in this document&period;<&sol;p>&NewLine;<p style&equals;"text-align&colon; justify&semi;"><strong>However&comma; you&&num;8217&semi;ll always be expected to include the following in your Articles of Organization&colon;<&sol;strong><&sol;p>&NewLine;<ul style&equals;"text-align&colon; justify&semi;">&NewLine;<li>Your LLC&&num;8217&semi;s name<&sol;li>&NewLine;<li>Your registered agent&&num;8217&semi;s information<&sol;li>&NewLine;<li>Names of LLC owners<&sol;li>&NewLine;<li>Details on how the company will be managed<&sol;li>&NewLine;<&sol;ul>&NewLine;<p style&equals;"text-align&colon; justify&semi;">After you submit your Articles of Organization&comma; you&&num;8217&semi;ll also have to pay a small filing fee&period;<&sol;p>&NewLine;<h2 style&equals;"text-align&colon; justify&semi;">LLC Operating Agreement<&sol;h2>&NewLine;<hr &sol;>&NewLine;<p style&equals;"text-align&colon; justify&semi;">The next is to create an LLC Operating Agreement for your company&period; This is where you detail how your company will be run&period;<&sol;p>&NewLine;<p style&equals;"text-align&colon; justify&semi;">This agreement will include the names of the owners of the LLC and the distribution of their ownership&period;<&sol;p>&NewLine;<p style&equals;"text-align&colon; justify&semi;">It will also include information on voting rights&comma; profits and loss distribution&comma; governance rules&comma; meeting information&comma; etc&period;<&sol;p>&NewLine;<p style&equals;"text-align&colon; justify&semi;">It&&num;8217&semi;s best to consult your business attorney on how to draft an LLC operating agreement&period;<&sol;p>&NewLine;<p style&equals;"text-align&colon; justify&semi;">If you know any fellow entrepreneurs&comma; you want to ask if you can look at their LLC Operating Agreements as a template&period;<&sol;p>&NewLine;<p style&equals;"text-align&colon; justify&semi;">Some states might not require LLC Operating Agreements&period; Nevertheless&comma; it&&num;8217&semi;s always best to draft one to make it easy to run your business&period; It helps establish rights and responsibilities for the owners of the LLC&period;<&sol;p>&NewLine;<p style&equals;"text-align&colon; justify&semi;">It also helps prevent or reduce issues that might occur among the owners of the LLC&period; Always work to create an LLC Operating Agreement that works as a &&num;8220&semi;win-win&&num;8221&semi; for all the parties involved&period;<&sol;p>&NewLine;<h2>Registered Agent and Management<&sol;h2>&NewLine;<hr &sol;>&NewLine;<p style&equals;"text-align&colon; justify&semi;">A registered agent refers to an individual or organization that handles the legal obligations of the LLC&period; The registered agent accepts legal papers if the LLC gets sued&period;<&sol;p>&NewLine;<p style&equals;"text-align&colon; justify&semi;">The registered agent has to have a physical address in the state where the LLC is based&period;<&sol;p>&NewLine;<p style&equals;"text-align&colon; justify&semi;">For LLC formation&comma; you can look at commercial registered agents whom you can hire for your business&period; Any of the owners of the LLC can also act as the registered agent for the business&period;<&sol;p>&NewLine;<p style&equals;"text-align&colon; justify&semi;">Most LLCs are managed by the members or by the owners of the LLC&period; You can also appoint outsiders to work as managers of the LLC&period; This is similar to having a Board of Directors for your company&period;<&sol;p>&NewLine;<h2 style&equals;"text-align&colon; justify&semi;">Laws&comma; Regulations&comma; and Taxes<&sol;h2>&NewLine;<hr &sol;>&NewLine;<p style&equals;"text-align&colon; justify&semi;">Before you choose where to register your LLC&comma; you want to educate yourself on the local laws&comma; regulations&comma; and taxes&period; It&&num;8217&semi;s best to hire a business attorney to advise you on what&&num;8217&semi;s best&period;<&sol;p>&NewLine;<p style&equals;"text-align&colon; justify&semi;">For example&comma; there might be certain laws you have to adhere to for the type of business you run&period;<&sol;p>&NewLine;<p style&equals;"text-align&colon; justify&semi;">For example&comma; if you run a liquor store there are states that have strict rules on the sale of alcohol&period; The same goes for states that regulate the sale of cannabis&period;<&sol;p>&NewLine;<p style&equals;"text-align&colon; justify&semi;">Make sure you educate yourself on the laws regarding running a business in a state&period; You also want to learn if you need to obtain a license for the type of business you run&period;<&sol;p>&NewLine;<p style&equals;"text-align&colon; justify&semi;">You also have to look at regulations regarding running a business in each state&period; You want to choose the regulations that aren&&num;8217&semi;t a hassle for you to comply with&period;<&sol;p>&NewLine;<p style&equals;"text-align&colon; justify&semi;">Finally&comma; you want to look at taxation in your LLC&period; As of this publication&comma; there&&num;8217&semi;s no federal taxation specifically for LLCs&period;<&sol;p>&NewLine;<p style&equals;"text-align&colon; justify&semi;">But there might be state taxation for your LLC&period; Similarly&comma; one state might require your LLC to collect sales taxes while others won&&num;8217&semi;t&period;<&sol;p>&NewLine;<p style&equals;"text-align&colon; justify&semi;">Make sure you take your time with this research to determine what laws&comma; regulations&comma; and taxes work best for you&period;<&sol;p>&NewLine;<h2 style&equals;"text-align&colon; justify&semi;">Filing Fees and Associated Costs<&sol;h2>&NewLine;<hr &sol;>&NewLine;<p style&equals;"text-align&colon; justify&semi;">Finally&comma; you want to look at the filing fees and associated costs for running your LLC&period;<&sol;p>&NewLine;<p style&equals;"text-align&colon; justify&semi;">You&&num;8217&semi;ll have to pay a one-time filing fee to establish your LLC&period; You&&num;8217&semi;ll then also have to pay annual fees to run your LLC&period;<&sol;p>&NewLine;<p style&equals;"text-align&colon; justify&semi;">You want to look at the filing fees and associated costs that work best for your company&period; For example&comma; one state might have high filing fees but low annual fees&period; Others will have a low filing fee but expensive annual fees&period;<&sol;p>&NewLine;<p style&equals;"text-align&colon; justify&semi;">You want to consider what works best for your company&&num;8217&semi;s budget&period; These are regular expenses that you have to account for with your LLC&period;<&sol;p>&NewLine;<h2 style&equals;"text-align&colon; justify&semi;">You&&num;8217&semi;re Ready to Form an LLC<&sol;h2>&NewLine;<hr &sol;>&NewLine;<p style&equals;"text-align&colon; justify&semi;">Now you&&num;8217&semi;re ready to form an LLC and run a successful business enterprise&period; Start by deciding what type of business you wish to run&period;<&sol;p>&NewLine;<p style&equals;"text-align&colon; justify&semi;">Next&comma; you want to research the best states for incorporating your business&period; Create a shortlist of names so you can choose what works best for your LLC&period;<&sol;p>&NewLine;<p style&equals;"text-align&colon; justify&semi;">Spend time in finding a reliable registered agent and management team for your LLC&period; Make sure you also spend time to draft the LLC Operating Agreement that works best for you&period;<&sol;p>&NewLine;<p style&equals;"text-align&colon; justify&semi;">You can find more great tips on entrepreneurship on our website&excl;<&sol;p>&NewLine;

Hardik Patel

Hardik Patel is a Digital Marketing Consultant and professional Blogger. He has 16+ years experience in SEO, SMO, SEM, Online reputation management, Affiliated Marketing and Content Marketing.

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