How to start an LLC


Starting an LLC business structure has many advantages such as personal asset protection, a flexible business structure and tax advantages. Starting an LLC is easy. We take you through the steps.

Step 1: Select your state

The laws to form an LLC varies from state to state. However, the steps are the same.
First decide in which state you plan to conduct business.  You can choose to form an LLC in any state, however, starting an LLC in the state they live in and plan to do business. If your business will have a physical presence like an office, storefronts, employees etc. in different states, you will need to register a foreign LLC in each of those states.

Step 2: Name Your LLC
Ruling names vary by state, but in general you will need to observe these guidelines. Legally your business name:

  • Should not be the same as other LLCs registered in the state in which you plan on doing business. You will want to make sure your name is catchy and legitimate. If you need help coming up with a business name, try online business name generators. Most are free. Consider registering a domain name (.com) irrespective whether you plan on having an online presence now or in future. 

The next step is to register your domain name through a registrar service. Also consider setting up a professional email account. Try Google’s G Suite – it’s free for the first 14 days, and thereafter at a minimal monthly fee. 

Keeping your business name, website name, and email account as similar as possible gives customers the impression that you are a professional business. Finally, trademark your name – it protects the name of your business, goods, and services, and prevents others in similar industries in the U.S. from using them. You can do a trademark search on  Federal trademark Database.  

  • Must include the phrase “limited liability company,” or one of its abbreviations (LLC or L.L.C.),
  • Cannot include words that could confuse your LLC with a government agency (FBI, Treasury, State Department, etc.), and
  • Restricted words (e.g. Bank, Attorney, University) may require additional paperwork and a licensed individual, such as a doctor or lawyer, to be part of your LLC.

Step 3: Choose A Registered Agent

You will now need to complete the required documents. In most states you will need to list your registered agent, sometimes called a statutory agent, or agent for service of process. A registered agent is someone who agrees to receive legal documents on your behalf. Most states allow anyone who is a state resident over age 18 who has a physical address in the state – not a PO Box – to serve as a registered agent.

You can appoint a friend, colleague, or even yourself. However, it is advisable to hire a registered service agent to assist you with this part of the business. To learn more about registered service agents, visit this site.

Step 4: File Your LLC With the State

You are now ready to officially form your limited liability company. In most states, you will file an LLC formation document with the Secretary of States or whichever department handles business filings in the state in which you are forming. Most states also offer online filing. Filing fees vary from state to state. 

Step 5: Create an LLC Operating Agreement
Although most states do not require LLCs to have an operating agreement, It is highly recommended that your LLC has one as it is the only way to legally define how the LLC will be operated. This document will also make clear the division of ownership, profits, and will give you something to return to if there is a dispute. It is recommended to have an operating agreement even if you are the only member (single-member LLC) as it gives you the opportunity to formalize what you want to happen for example, in the event you can no longer manage the business. 

An operating agreement isn’t filed with the state – this internal documental is stored in your company records, and should outline:

  • Each member’s responsibilities.
  • How new members will be admitted.
  • How existing members may transfer or terminate their membership.
  • How profits and dividends are to be distributed.

Tip: “You may want to consider having an attorney review your operating agreement to make sure all the bases are covered.”Or you can just hire a professional company like ZenBusiness, for example, to start an LLC for you.

Step 6: Obtain an EIN
The Employer Identification Number (EIN) or Federal Tax Identification number is basically a social security number for your company. This is the identification number your LLC will use on its bank accounts, as well as income and employment tax filings. Your EIN allows the IRS to keep track of your business’ tax reporting. You can apply for an EIN online, by fax, mail or phone, although online is quickest. For more details visit the IRS website. Application is free.


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