Summary of Setting Up an LLC
Setting up an LLC is a great way for business owners to limit their liability for company debts. Here’s a step-by-step guide to forming an LLC.
- Complete and File Necessary Paperwork
- Choose a business name
- Register for a business address
- Find a registered agent
- File other state-required documents
- Consider filing online for faster results
Time Frame and Considerations for Forming an LLC
How long does it take to get an LLC? The time it takes to form an LLC varies by state and filing method. Processing times range from a few business days up to multiple weeks.
Factors to consider when selecting which state to form an LLC include:
- State filing fees
- Annual fees
- State taxes
- Legal requirements for the LLC
- Location of main business activities
Steps to Start an LLC
To start an LLC, you undergo several procedures to form your Limited Liability Company. Hiring an LLC Formation Service company can assist you with the process and requirements. Steps include:
- Selecting a state
- Choosing a business name
- Checking name availability
- Filing formation documents
- Creating an operating agreement
- Getting an EIN
- Setting up licenses and permits
Benefits of Forming an LLC
An LLC offers business owners personal asset protection and flexibility in running their company. Follow this 7-step guide to set one up:
- Choose and verify a business name
- Select registered agent
- File formation paperwork
- Make operating agreement
- Get an EIN
- Arrange financing and accounting
- Set up business licenses and permits
Should I Create an LLC before Starting a Business?
Before starting a business, forming an LLC provides liability protection. An LLC shields personal assets if the business has debt. Alternatively, a sole proprietorship has no liability protection.
An LLC creates a legal separation between business and owners. Business debts stay with the LLC, safeguarding personal assets. Sole proprietors have unlimited liability for business obligations.
LLCs allow flexible taxation unlike sole proprietorships. Owners can choose corporate taxes or pass-through taxes.
Considerations for Trademarking and Business Growth
Before trademarking a business name, form an LLC. The LLC becomes the trademark owner. LLCs shield owners’ personal assets from business debts. Sole proprietors have unlimited liability. Although LLCs cost more initially, their legal protections can benefit growing businesses.