How To Form a Limited Liability Company (LLC) in the USA
A limited liability company is a hybrid of a corporation and a partnership.It protects owners from lawsuits.Like a partnership, profits and losses can be divided among owners.You can have a one-person limited liability company in many states.Pick a business name and fill out the necessary paperwork to form a limited liability company in your state.
Step 1: A memorable name is what you should pick.
It is important that your name is remembered by consumers.It should encourage people to use your products or services.Akron lawn care is boring.Consumers are told they can have a lush lawn.
Step 2: Follow the laws of your state when it comes to business names.
Most states will require that you have an appropriate designator at the end of the name.There is a Liability Co.Certain words, such as Bank, Insurance, or Trust, will be banned by states.You can check your state's laws.
Step 3: If the name is available, check it.
If another business is using the same name in your state, you can't use it.In most states, you can find a business name database on the Secretary of State's website.If someone else has already patented the name, you can't use it.The federal trademark database can be found at www.uspto.gov/trademarks-application-process/search-trademark-database.The URL should be available if you want a website.The URL has the businesses name as part of it.
Step 4: Don't use your business name.
You can reserve your business name for a short period of time in most states.You have time to file your other paperwork.To reserve the name, you have to pay a fee.The Secretary of State has the necessary paperwork.
Step 5: You should trademark your name.
A business name can be a trademark if you use it to distinguish your goods or services.If you sell a product with your business name blazoned on the packaging, it's probably a trademark.You can file a trademark online.Whether you trademark or not, you have rights.When someone illegally uses your trademark, you can file a lawsuit in federal court.
Step 6: You can choose a management structure.
There are two ways to have a member-managed or manager- managed company.All of the members run the company.passive investors don't take part in running the business.Chances are you will be member-managed if you are a small company.
Step 7: Pick an agent.
Papers need to be served on someone if they want to file a lawsuit.This person is your registered agent.You can either pay a company to serve as your agent, or one of the founding partners can.
Step 8: You should file your articles of organization.
Depending on your state, this paperwork goes by different names.Regardless of the name, you must file the paperwork with your Secretary of State.The blank articles of organization should be used by your state.You can get them online.You can file your articles online in some states.The filing fee will vary by state.It shouldn't be more than a couple hundred dollars.
Step 9: You should draft an operating agreement.
The operating manual is used for your business.If your state doesn't require you to file an operating agreement, you should keep it at your main place of business.A description of your business purpose is a must in a solid operating agreement.Each member is identified with their ownership percentage.The members have their rights and duties.The voting power of the members is explained.You have the option of giving each member an equal vote or weight the vote according to ownership percentage.There is an explanation of how profits and losses will be distributed.There are rules for calling and holding meetings.If a member dies, quits, or is removed from the company, there is a buy-sell agreement.
Step 10: You can publish a notice.
You need to publish your intent to create an limited liability company in a newspaper in some states.After you submit an affidavit of publication as proof, the notice typically runs for several weeks.Check with the Secretary of State.
Step 11: Obtain your employer identification number
Your tax ID is your EIN.You need this number to pay taxes and open a bank account.If you want to apply for an employer identification number, you need to obtain your EIN online.You don't have to pay for your EIN.
Step 12: You need to register with your state tax office.
Call the office to find out what state taxes you have to pay.Many limited liability companies have to pay sales tax, use tax and unemployment tax.To register your company, contact the appropriate tax office.
Step 13: Obtain licenses and permits.
Before you can open your doors, you might need additional licenses or permits.Food and beverage businesses often need more than one permit.You can check with the county clerk.You can get in touch with your nearest Small Business Development Center.A counselor can help you find the licenses and permits you need.You can find the nearest SBDC at the SBA website.
Step 14: You can open a bank account.
Personal and business banking should be separate.You might lose your limited liability protection if you mix funds.You can find a bank that offers what you need.You can open the account in person or online, but you will need your EIN, articles of organization, and possibly a resolution giving you permission to do so.
Step 15: You should get business insurance.
If someone gets a court judgment against you, they can't come after your home or car, but you can be protected from lawsuits.You should still get general business liability insurance.An insurance broker can help you find the right policy.
Step 16: You need space for your business.
If you want to run your business from home, you should check your neighborhood's laws.Go to the local office and check.You may need a permit.Commercial space can be found on websites and in your local newspaper.The square footage is used to calculate commercial rents.
Step 17: It is legal to hire employees.
Within 20 days of hiring an employee, you must report them to the New Hiring Office in your state.If you create an account with the appropriate office, you will be able to report new hires online.You might have to buy workers' compensation insurance as well.To find a licensed insurance agent in your state, check with the Department of Labor.
Step 18: Professional help for your business.
You might not be able to do everything yourself before you grow so large that you can't.Professionals can help you untangle the knots.Business lawyer.A lawyer can help you understand your reporting requirements, but they can also represent you in court.Referred to by your nearest bar association.An accountant.At tax time, an accountant can help.They can assess any plans for growth as a business advisor.There is a bookkeeper.A person is in charge of your business transactions.It might make sense to hire someone when you want to use software.
Step 19: Decide how you want to be taxed.
The IRS doesn't recognize the form.If you have at least two members, your company will be treated as a partnership.You can file Form 8832 if you want to be treated as a corporation for tax purposes.Discuss the options with your lawyer and accountant.If you have a limited liability company, you will have to report your profits and losses on your tax return.You can file Form 8832 if you want to be treated as a corporation.
Step 20: If it's necessary, file an annual report.
Depending on where you are, you must file an annual report in many states.Basic information, such as your address and name and address of one member, can be updated in some states.You have to pay an annual fee as well.Other states want more detailed financial records.You should check with the Secretary of State.