Sunday, Jan 16, 2022

How do you form an LLC in the right way?

Setting up an LLC can offer numerous benefits to your business, including giving your personal assets protection against liabilities. Aside from that,..


How do you form an LLC

Setting up an LLC can offer numerous benefits to your business, including giving your personal assets protection against liabilities. Aside from that, an LLC is considered the simplest way to establish a separate legal entity for your business.

Of course, while the process is generally easy, it’s still considered a good idea to understand the different steps involved to ensure you form your LLC the right way.

With that said, how do you form an LLC the right way? Well, you just need to follow seven easy steps.

Forming Your LLC in 7 Easy Steps

As mentioned, forming an LLC is relatively easy and simple. In fact, you only need around seven steps to successfully incorporate your business as an LLC. 

Of course, the requirements for incorporating your company will vary from state to state, but the steps involved for each one tend to be more or less similar.

With that said, check out the usual steps involved in LLC formation below.

  1. Decide on Your Business Name

The first step to forming your LLC is deciding what your company’s official name will be. It’s best to think about your business name carefully since this is what will be indicated in official documents.

Aside from that, your chosen business name needs to be unique, which means no other business in the state should have the same name. State laws also generally prohibit using specific terms in your chosen name, and you might also need to include a variation of the words “limited liability company” in it.

Fortunately, you can now check online whether your preferred business name is already in use or not through your state of incorporation’s database. You can also double-check the state’s guidelines when it comes to business names online.

You should also note that, in some cases, you can even reserve your preferred name for a short period to ensure it remains yours until you can file the necessary documents.

2.  Assign Your Company’s Registered Agent

Once you have settled on a business name, the next step would be to designate your company’s registered agent. Assigning a registered agent for your company is considered a requirement in all 50 US states.

In this case, a registered agent will serve as your business’s point of contact for all legal and official documents, such as subpoenas and lawsuits. They will then forward these to the proper person in the LLC.

Of course, not just anyone can be a registered agent; there are a few criteria you need to meet before you can serve as a company’s registered agent. For example, they must be at least 18 years old, and they need to reside within the company’s state of formation.

Aside from that, they also always need to be available during regular business hours to receive any legal documents served by the state. 

With that said, you can designate an employee or someone else to be your company’s registered agent. You can even serve as one, although this is generally not recommended. Alternatively, you can avail of third-party registered agent services, but this can cost you extra.

3.  Prepare Your Articles of Organization 

When you already have a registered agent, the next step would be to prepare your LLC’s Articles of Organization. 

Again, the requirements for this typically vary from state to state, so you’ll need to check with your state of formation beforehand. Doing so ensures you comply with all the requirements and speed up the process of incorporation. 

However, in general, you need to provide the following information in the given documents:

  • Business name
  • Official address of the company
  • Business purpose
  • Management structure
  • Your registered agent’s contact information

Once you have completed everything, at least one business owner must sign the form before filing it with the state.

4.  File Your LLC’s Articles of Organization

Once you have everything ready, including the necessary information for your LLC formation, you can then file your company’s Articles of Organization with the secretary of state. 

You should note that there are some fees you need to pay for when filing, and these will also depend on your state of formation. Then, once everything has been approved, you’ll be notified of your LLC’s official registration and issued a Certificate of Formation by the state.

5.  Create Your Company’s Operating Agreement

Once your LLC is officially registered, you can proceed to create your company’s operating agreement. In this case, an operating agreement outlines everything there is to know about the company’s management, including all the company’s legal, financial, and administrative aspects. 

For example, it can detail the specific management rights of the LLC members, the profit distribution terms, and guidelines for when you want to leave the company. 

Although not all states require this for LLCs, it’s still a good idea to create one since this can streamline your company’s operations. This can also prevent potential conflicts from arising among the members later on.

6.  Comply with the Other Requirements

Aside from the operating agreement, you also need to ensure you comply with the other requirements once your LLC has been registered. Some examples of these include obtaining your business’s official Employee Identification Number (EIN) from the IRS.

An EIN is necessary when complying with the state’s tax requirements since your company will be considered a separate legal entity once incorporated. Fortunately, getting an EIN from the IRS can be done online, and it’s entirely free.

Besides getting your EIN, you’ll also need to obtain the necessary business permits and licenses once your company is registered. The specifics for these tend to vary as well, and depending on what industry your business is in, you may need additional permits or licenses.

You can also open a separate bank account for your company during this stage. For this, you’ll need to present your company’s Articles of Organizations and other relevant documents.

7.  File Your Annual Reports

Last but not least is filing your annual or biennial reports. In general, most US states will require you to file annual reports, which essentially means you just need to update the state regarding your company. 

This includes notifying the secretary of state if there have been changes with your company’s contact information. You should also note that there’s typically a filing fee for these reports. 


Incorporating your business as an LLC can open it to numerous benefits that you otherwise can’t enjoy with other legal structures. Moreover, it’s the simplest way to provide additional protection to your assets since the process for forming an LLC is relatively straightforward.

With that said, hopefully, this article has helped you understand the different steps involved in forming an LLC – from choosing a business name to filing your annual reports.


The post How Do You Form an LLC the Right Way? appeared first on South Florida Caribbean News.


By: South Florida Caribbean News
Title: How Do You Form an LLC the Right Way?
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Published Date: Thu, 02 Dec 2021 20:18:52 +0000

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