How To Start an LLC in 2024

What is a Limited Liability Company (LLC)

A limited liability company (LLC) is a business structure that protects its owner’s assets, such as a house and car, from business debts and liabilities. If the owner gets sued, these assets usually are safe. An LLC can also have one or more owners, who are called members. Members report the LLC’s profits on their personal tax returns, avoiding double taxation. 

You can also consult a professional or a tax advisor to understand the best option for your LLC. 

7 Quick Steps to Set Up an LLC 

A limited liability company (LLC) offers its owners tax flexibility and liability protection. Therefore, setting up one is a great decision. To start an LLC, here are 7 quick steps you should follow: 

1. Choose your company name 

When you choose a name for your company, there is more to consider besides marketing and boosting brand identity. You should also meet the state law requirements. 

Generally, here are a few factors you should consider when choosing a company name to adhere to the state’s regulations: 

• Don’t choose a business name that’s already being used 

• Avoid specific words directly implying you're in a particular business, such as bank, insurance, and university  

• You’ll need to include LLC or limited liability company at the end of your business name 

• Do not mislead the public in any way, like rearranging words to make it look similar to a successful company, with your company name

• Avoid names that might be derogatory or offensive, as it is immediately rejected

You can also check your state’s specific regulations when naming an LLC, as they may have other requirements.

2. Designate a Registered Agent 

Designating a registered agent, or someone who handles legal documents, is necessary for an LLC since every state requires it. A registered agent’s job is to receive legal documents, such as official government correspondence, on behalf of your LLC. They will then forward these documents to the designated person in your business. 

Thankfully, you don’t need to prepare this all alone. Go to Bizee and choose their service Form an LLC. They provide a free, complete, and easy-to-use Registered Agent service for the entire year. 

3. Choose Your LLC’s Structure 

Generally, there are two LLC structures you can choose from before creating your LLC’s article of organization. 

• Member-managed LLC. This structure allows all owners to contribute and participate in the business’s operations. It is common for small LLCs since owners prefer to monitor and manage the business themselves. 

• Manager-managed LLC. Meanwhile, a manager-managed LLC is an LLC structure that assigns or chooses someone to operate as manager and foresee daily business operations. With this LLC structure, managers don’t need to be the members or owners of the LLC. 

Ensure to choose the LLC structure that suits your needs and preferences. Deciding the proper structure for your company can streamline your operations and lead to success. 

4. Prepare the LLC Articles of Organization Form 

To start an LLC, you need to know each state’s requirements and procedures. Here are some essential information you need to provide: 

• Business name

• Address of the main place of business

• Purpose and duration of LLC

• How the LLC will be managed 

• Registered agent’s name

• Agent’s registered office address

• One or more of the LLC’s organizer’s signature 

To avoid any hassle, you can choose from Bizee's formation packages, which include assistance in drafting, preparing, and filing articles of organization. 

5. File the Articles of Organization 

After preparing the articles of organization, it’s time to file them and submit them to your state. Ensure every detail is accurate to avoid any problems. You may also need to pay a filing fee in the state where you are establishing your business.  

Once your formation documents are approved, you’ll receive a certificate from the state indicating that your LLC is officially registered. You can then use this certificate to open a business bank account and get a tax ID number.

6. Get an EIN and Business Bank Account  

Employer identification number (EIN) is a nine-digit number that identifies your business for tax purposes and works like a Social Security Number (SSN). Applying for EIN is free from the Internal Revenue Service. An LLC with more than one member is required to have an EIN for tax filing, employee hiring, and business license applications. 

Even when opening a business bank account, they may require you to have an EIN. It also helps establish credit for your business and maintain your business’s official standing as a legal business entity. 

To get an employer identification number (EIN): 

• Check your eligibility

• Your principal business should be located in the United States or U.S. Territories.

• You must have a valid Taxpayer Identification Number

• Complete the online application 

• Submit your application 

• Receive your EIN 

Getting a business bank account is another crucial factor you need to get for your business. Opening a business bank account allows more accurate tax filing and easier management of operations like payroll. 

To get a business bank account: 

• Choose the appropriate bank for your business

• Prepare necessary documents (EIN, government ID, business formation documents, ownership agreements, business license) 

• Apply online or directly go to the bank

• Complete the application

• Create an initial deposit 

• Set up an online banking 

• Request a card 

However, to avoid these tedious processes, Bizee offers a business banking account to get your business up and running quickly. This is already included in all their packages.   

7. Keep Your LLC Active 

After setting up your LLC, you need to ensure that you keep it in compliance with he state’s regulations. Check your state's business filing website for the latest guidelines. You might be required to submit an annual report updating your LLC's information and pay an annual filing fee.

To keep your LLC active: 

• File an annual report updating your LLC’s information. 

• Comply with tax obligations. 

• Regularly update your operating agreement. 

• Renew your business licenses and permits. 

• Keep accurate records of your business. 

Final Thoughts 

Starting a limited liability company (LLC) can be daunting and expensive. However, resorting to third-party services to help you prepare and process all the documents makes it easier. A limited liability company is essential and takes time to establish. Fortunately, a company like Bizee provides services that allow you to set up an LLC and guide you through the entire business formation process. 

Grab Bizee’s formation package and create your FREE LLC today