Launching a US LLC: Essential Steps to Establish Your Limited Liability Company
What are the key steps to forming an LLC in the United States?
Here are the key steps to forming a Limited Liability Company (LLC) in the United States:
Choose a Name: The first step in forming an LLC is to select a unique name for the company that complies with state laws. This name must be distinguishable from other registered business names in the state and include the phrase "LLC" or "Limited Liability Company" at the end.
File Articles of Organization: To create an LLC, you must file Articles of Organization with the appropriate state authority. This document contains basic information about the company, such as the name, address, and the names and addresses of the owners (also called "members").
Appoint a Registered Agent: A registered agent is a person or business that accepts legal paperwork on behalf of the LLC. Every state requires LLCs to have a registered agent with a physical address in the state where the LLC is formed.
Create an Operating Agreement: While an operating agreement is not required in all states, it is highly recommended. This document outlines the rights and responsibilities of the members, operational details, decision-making processes, tax structure, and other essential information.
Obtain Necessary Permits and Licenses: Depending on the type of businessand the location, you may need to obtain specific permits and licenses to operate legally. Examples include business permits, occupational licenses, liquor licenses, and more.
File Annual Reports: Many states require LLCs to file yearly reports, which provide updated information about the business, such as its officers and registered agent, business address and activities, and more. Check with your state's Secretary of State to determine the specific requirements for annual or biennial reporting.
Obtain an EIN: An EIN, or Employer Identification Number, is a unique nine-digit number assigned by the IRS to identify a business entity for tax purposes. Even if the LLC does not have employees, obtaining an EIN is necessary for tax purposes and for opening a bank account or obtaining credit.
Open a Business Bank Account: Opening a separate business bank account is essential for managing your finances and separating personal and business expenses.
Comply with Tax Requirements: LLC members are generally responsible for reporting LLC profits and losses on their individual tax returns. However, depending on the state and size of the business, additional tax obligations may apply, such as sales taxes or payroll taxes.
It's recommended to consult with a lawyer or business advisor to ensure compliance with all legal and regulatory requirements and to avoid costly mistakes when forming an LLC.