Motivational

6 Steps for Creating an LLC for Your Business

Admin

posted on 9 months ago — updated on 1 second ago

108
views

Learn how to create an LLC for your business by following these essential steps.

Search ... Results See all results

Quick Links

SECTIONS

JOIN US

GET IN TOUCH

CONNECT

Instagram Facebook Tiktok Linkedin Pinterest X-twitter

Unlock the Latest Knowledge that Can You Help You Achieve More in Life with More Confidence

Print and Digital Options Available

BOOKMARK Share

TABLE OF CONTENTS

woman using her phone to look up how to create an llc while holding two cardboard boxes in her left hand

I started working with a new editing client in 2022 as a freelance journalist. He didn’t bat an eye when I told him my rate to copy edit his legal blog. And, he eventually went on retainer with me. I wanted to be able to attract more clients like him: professional, willing to value creative services and easy to work with.

So I decided to up my game professionally. One night, while I was sitting in a graduate seminar with the university’s department chair, I got distracted. I have the type of brain where, when something comes into my mind, I have to do it right then and there. So I formed my limited liability company (LLC), Springer Creative Associates, while we discussed the previous week’s reading.

An LLC is a business structure that combines the pass-through taxation of a sole proprietorship or partnership with the limited liability of a corporation. This means that, in the event of insolvency or litigation, your personal assets are protected from creditors since they’re recognized as separate entities.

Before setting up your LLC, you should probably do some research to decide if that’s the most appropriate business entity for you. Once you’ve decided that an LLC is the way to go, you can file it using these steps:

You can file your LLC in whatever state you would like. But, most people file in their own state or the state in which they’ll likely be doing business.

After you decide where to file, you need to come up with a business name and check to see if the name is available in your chosen state. You should choose a name that is memorable and suits your plans for growth. As a marketer, I strongly recommend you choose a name that will be easy to optimize for search engines. I have worked with businesses that have very generic names and are hard to find during a Google search.

You will be required to have a registered agent. A registered agent is someone who is registered to receive legal and tax notices on behalf of your business. You can be your own registered agent, or you can appoint someone else, often your attorney or a company that provides registered agent services.

Your LLC’s operating agreement will give its members protection from liability and clarify agreements between the members.

This is the process of becoming official when you file your state’s formation documents. You can usually do it yourself through the secretary of state, but you can also hire an attorney to do this for you.

Most businesses are now required to file something called a Beneficial Owners Information Report. This report is to ensure there is transparency in business ownership. You can file the report with FinCEN online.

These steps make your LLC legal. But, there are a few things I personally wish I had known before filing. I filed my LLC through a DIY legal website, and I regret it. If I were to go back and do it again, I would either file myself through my state or work with a business attorney. DIY filing companies upcharge their services without the benefits of working with an actual attorney, who would have expertise in your area of business, the state that you plan to do business in and what compliant documents should look like.

Regardless of whether you file on your own or work with a business attorney, it’s still a good idea to get legal advice. Jon Morgan is the CEO of Venture Smarter, a consulting firm that specializes in helping startups scale and grow. He says one of the biggest pitfalls entrepreneurs face while filing an LLC is not fully understanding the local laws.

“Each state in the U.S. has its own set of regulations governing LLCs,” Morgan says. “These can vary greatly, so freelancers should familiarize themselves with the specific laws in their state before starting their business. This can be a complicated task, so I often recommend that freelancers consult with a local attorney or business adviser to ensure they are fully compliant with all local and state laws.”

I am going to own up to a very foolish mistake I made when I filed my own business: I paid for my employer identification number (EIN).

As a technology journalist, I’d like to think I would have known better. However, there are companies out there that make themselves look like the IRS website, will take you through the registration process and charge $300 or more for something you can do for free.

After you file your LLC, there are some general housekeeping tasks to complete:

This article appears in the September 2024 issue of SUCCESS+ Magazine. Photo by Prostock-studio/Shutterstock.

5473 Blair Road, Suite 100
PMB 30053
Dallas, TX 75231

Unlock the Latest Knowledge that Can You Help You Achieve More in Life with More Confidence

Print and Digital Options Available

Unlock the Latest Knowledge that Can You Help You Achieve More in Life with More Confidence

Print and Digital Options Available

https://www.success.com/how-to-create-an-llc/