If you’re starting a business, you should consider structuring it as a limited liability company (LLC). An LLC has a number of benefits, including providing you with more credibility and lessening your tax burden.
But keep in mind that forming an LLC isn’t as simple as sticking “LLC” at the end of your business’s name. Keep reading to learn the answer to what you need to do to start an LLC.
How does starting an LLC work?
Starting an LLC isn’t the most complicated process, but you’ll probably still want a helping hand. Follow these steps to successfully start your LLC:
- Choose a name: Speaking of choosing a name, that’s your first step. Each state has different rules for LLC naming, but your name must include something along the lines of LLC or Limited Liability Company, and it can’t have the same name as an existing business.
- File articles of organization: You’ll need to file your articles of organization with the state’s corporate filing service. This will involve providing basic company information, like your business’s name and address. There’s also a filing fee of around $100.
- Choose a registered agent: Your registered agent is an individual or company that agrees to accept legal papers on behalf of the LLC if the company gets sued. An LLC member can act as the registered agent for the LLC, but they must have a physical street address in your state.
- Decide on member vs. member management: Many smaller LLCs are managed directly by their members, but LLCs can also appoint outsiders to manage everything. The managers act like a board of directors that oversees a large corporation.
- Create an LLC operating agreement: The next step in what you need to do to start an LLC is drafting an operating agreement. This internal document states how your LLC is structured and run. You’ll need this document if you ever want to get a small business loan.
- Comply with tax and regulatory requirements: Additional tax and regulatory requirements apply to LLCs. These include things like an IRS Employer Identification Number (EIN), business licenses and sales and employer taxes. Our team at Kedean’s Generation can help with all of these documents.
- File annual reports: You’ll need to file tax reports with the state and pay associated fees each year. Neglecting to do this can result in some serious fines, so do your research and stay up to date with your reports.
- Register to do business in other states: This one might not apply if you’re only interested in doing local business. But if you want to operate in other states, you’ll need to register to do business in those states and appoint a registered agent for each additional state.
Let us help you and your business
Whether you’re interested in starting an LLC or you need a team to help with your existing LLC’s taxes, turn to our pros at Kedean’s Generation. With nearly 35 years of experience, nobody tops our level of knowledge service. Contact us today to set up an appointment or learn more about how starting an LLC works.
Categorised in: Starting a Business