A Simple Guide to Starting an LLC

Business formation is not rocket science; in fact, it’s pretty simple. If you’re ready to start your business and be your own boss, these simple guides will provide you with all the information you’ll need to form an LLC (limited liability company). All it takes is a great idea, a bit of motivation, and drive. The rest, we’ll help you out with, through this useful and practical step-by-step guide.

Want to learn more about how to start an LLC in your state? Read our state-specific LLC formation guides.

Wondering How to Start an LLC? Follow These 5 Steps:

1. Name Your LLC

Naming your business is part of the fun of business formation, but there are certain laws and requirements you should adhere to when naming your LLC. Here are some helpful rules you should follow to stay on top of the law and understand the do’s and don’ts:

• It may seem obvious, but your LLC must include the abbreviation LLC or L.L.C. in the name.
• Avoid using any government agency names such as IRS, FBI, etc. as it is prohibited.
• You’ll want to ensure that the name of your business is not taken in your state. You can easily investigate if this is the case by using our Business Name Generator or doing a name search through your Secretary of State or other relevant government website.
• If you’re interested in an online presence, you can do a domain search and secure its ownership by purchasing it in advance.

2. Choose a Registered Agent

A registered agent, also known as a resident agent, statutory agent, or agent for service of process, is a fancy title for someone who receives important documents on behalf of your company. Such documents include:

• Annual report
• Lawsuits
• Tax paperwork
• Correspondence

Registered agents are a requirement in most states to open a business. Here are some registered agent facts. You can:

• Hire a registered agent.
• Be your own registered agent as long as you or a trusted person can be at the given address M - F from 8 - 5 pm.

There are pros and cons to both, so you’ll have to decide which one is best for you.

Hiring a registered agent can cost you from $100 - $250 per year.

If you’re considering a registered agent, we recommend ZenBusiness for their quality service, easy-to-use dashboard, and ― best of all ― great pricing in all of their packages. 

3. File Articles of Organization

The articles of organization is a required document necessary for business formation.

• Depending on your state, this document may be called: Certificate of Formation, Articles of Incorporation, or Certificate of Organization.
• You may file this document online or ― in some states ― by mail at either your local Secretary of State office or other specific government office designated by your state.
• Information you’ll have to provide under your Articles of Organization includes:
  • Business name
  • The purpose of the business (e.g. services, products)
  • Registered agent name
  • Whether the company will be member-managed vs. manager-managed ― meaning if the business will be run by appointed managers or the owners/members themselves.

4. Employer Identification Number (EIN)

An EIN is used for tax purposes. Keep in mind that a Tax Identification Number (TIN) or Federal Tax Identification Number (FTIN) all mean the same. Your businesses’ EIN will be necessary when:

• You hire one or more employees
• You open a business bank account

5. Operating Agreement

An optional, but helpful business document is an Operating Agreement, especially if there are multiple owners involved in your business. This document will define the roles of the business, it’s members, managers, and employees. Essentially, it describes the daily operations clearly to avoid any future confusion or misunderstandings.

You can use our free LLC Operating Agreement tool to get started. Remember, you’ve got this!