How to start an LLC

Whether you settled on a name years ago or are still weighing your options, there are several rules to be aware of. For starters, the business name must have “LLC” or “Limited Liability Company” in the title.

A registered agent is a person or company that accepts official documents for a company. For instance, a registered agent could receive tax documents, file updates from the secretary of state’s office, or legal documents. 

An operating agreement explains how a business is run and should include the company’s hierarchy, an explanation of how decisions are made, and a summary of day-to-day operations. The document should also provide financial direction, explaining how profits and losses are managed.

When establishing an LLC, articles of organization are filed with the state in which it is organized in order to be officially recognized and sanctioned by that state.

Most businesses need an EIN, or an employer identification number, to function. This nine-digit number is issued by the IRS and is required for many financial transactions including paying taxes, hiring employees, or applying for a bank loan.

Depending on your business, it likely needs one or several licenses to operate. Each state is different in its requirements. Check with state and local officials to see which business licenses are required.

Most states require LLCs to file an annual report with the state. The report is meant to keep state officials informed about your business and points of contact. Should the state need to reach business owners to deliver notices or updates, the report provides that contact information.

A Certificate of Good Standing serves as proof that the entity exists and is authorized to transact business in the state. It means that the entity has filed all reports and fees with the Secretary of State’s office.

There are various fees that come with forming an LLC. The exact amount varies from state to state.