Starting a business is hard, but keeping it running can be even harder. Not only do you have to worry about the day-to-day operations of your business, but you also have to keep track of all the paperwork and legal hoops you need to jump through to stay compliant.
Getting your business LLC can take care of all that for you. By forming an LLC, you create a legally separate entity that shields your personal assets from any legal issues or debts incurred by your company. An LLC also makes it easier to raise money, sign contracts, and do just about anything else related to your business.
But how to get your business LLC? We are here to help you. To learn more about the process of forming an LLC, continue reading.
How to Get Your Business LLC: The Process
The process of establishing an LLC can be relatively simple, but it is important to follow the proper steps in order to ensure that your business is properly registered. To establish an LLC, you will need to register with your state’s business office. Depending on your state, you may also have to file additional documents.
Here are the common steps you will need to take to form an LLC:
1. Name Your Business
To form a limited liability company (LLC), your business must first select a name that is available for use in your state. The name of your LLC must contain the designation “LLC” or “Limited Liability Company.”
It’s important to choose something that is distinct from any other company registered in your state. You can check potential business names’ availability by searching the registered businesses database on the Secretary of state’s website.
2. File Articles of Organization
Once you have settled on a name for your LLC, the next step is to file articles of organization with your state business office. A properly filed article serves as official notice that you are forming an LLC and sets forth basic information about the company, such as its name, address, and purpose.
Although filing requirements vary from state to state, most states require that a filing fee and a completed LLC application accompany the articles. You will also need to file an LLC publication notice in many states. Once the articles have been filed and accepted, LLC formation is complete.
3. Establish Your Operating Agreement
Establishing an operating agreement is an important part of setting up your LLC. The operating agreement is an internal document that outlines the rules and regulations that govern your LLC. Everybody involved in a business should understand their rights and responsibilities by establishing an operating agreement right away.
This document outlines the members’ powers and duties, voting rights, and provisions pertaining to the transfer of interests. By clearly understanding these issues from the outset, you can help avoid potential conflict and confusion down the road.
No matter what the law says, an operating agreement can provide valuable protection for your LLC in case of disagreements or litigation.
4. Select an Agent for Registration
A registered agent is required in most states for the formation of an LLC. An LLC’s registered agent accepts legal documents on its behalf. The person you choose to form your LLC will usually be located in the state where your LLC will be formed.
Registered agents can be corporations that specialize in providing this service or individuals such as lawyers or accountants. You need someone who is reliable and available during business hours to accept service of process notices.
5. Obtain Necessary Licenses and Permits
After you have officially established your LLC and completed the paperwork, you will need to obtain any necessary licenses or permits from state and local governments.
The specific requirements will vary depending on the type of business and the location. Still, you can obtain the necessary paperwork by completing an online application or visiting your local government office.
By following these steps, you can get your business LLC properly registered. It is important to remember that each state has its own laws and regulations for forming an LLC, so make sure you understand any additional requirements in your area.
Why Should You Get an LLC for Your Business?
Forming an LLC provides important legal and tax protection for your business. An LLC shields you from personal liability, which means that as the owner of the business, you will not be held personally responsible if the business is sued. This can help protect your personal assets in case of any lawsuit or creditor claim against the company.
LLC also provides tax advantages that can save you money. Depending on the size and structure of your business, an LLC may allow you to pay less in taxes than other forms of business entities.
Plus, because there is no double taxation with an LLC meaning the profits are not taxed at both the corporate and individual levels, more of your income stays with the business.
Overall, forming an LLC can offer you and your business important legal and financial benefits that make it a wise choice for any business owner.
What Is the Turnaround Time for Getting an LLC?
The answer depends on the state in which you’re forming your LLC. Most states have a standard processing time of two to three weeks, though some may be faster or slower. You can usually expect to receive your LLC documents within that timeframe, whether you submit them online or through the mail.
In some cases, you may be able to expedite the process for an additional fee. Once you have all the required paperwork, turnaround time is usually pretty quick.
Does LLC Affect Your Personal Credit?
There’s a common misconception that setting up an LLC will help protect your personal credit score. The situation is not necessarily as it appears. If you take out a loan in your LLC’s name and then default on the payments, your personal credit score will be impacted. The same is true if you cosign or personally guarantee an LLC loan.
In short, an LLC’s credit score is only relevant to the business itself. Your credit score shouldn’t be affected if you don’t cosign or personally guarantee any of the business’s debts.
How Long Does an LLC Last?
Most limited liability companies, or LLCs, are set up so that they don’t have an expiration date. This means that, in general, an LLC will last until the members decide to dissolve it. LLCs are required to pay a renewal fee every one or two years, depending on the state.
If an LLC does have an expiration date, it will be stated in the articles of organization. It’s important to note that even if an LLC expires, the members may still be liable for the debts and obligations of the company.
So now that you know how to get business LLC, it’s time to start the process. You can improve your business’s financial and legal protection by understanding the laws and regulations governing LLC formation.