An LLC, or limited liability company, is a great way to protect your assets while allowing you to earn more money.
It’s also really easy to set up! We’ve created this blog post with 7 steps that will walk you through the process of setting up an LLC for yourself. Before we get started though, let’s go over what an LLC is and how it works!
Determine The Purpose Of Your Business
When you start a business, one of the first things you need to do is determine why your business even exists in the first place. This may seem pretty straightforward but it isn’t always that easy.
Once you have determined what problem your business plans on solving for consumers and how exactly it’s going to go about doing so, then setting up an LLC should be much easier because this will help ensure that all aspects of starting a company are compliant with regulations from both state and federal agencies which makes everything run more smoothly when filing paperwork at tax time or dealing with issues regarding employees being paid correctly according to their employment status (i.e., if someone works part-time vs full-time), etc…
If you’re planning on setting up an LLC in Texas, the next most important step you need to take is determining what your business will be. This is where knowing the purpose of your LLC comes into play because it’s going to help give you a better idea about whether or not to run an online company, brick and mortar shop.
Choose A Name For Your LLC
There are several rules and regulations regarding choosing an LLC name which you can find by going to your state’s Secretary Of State website. For example, in some countries, the company name must include “Limited Liability Company” or one of its abbreviations (i.e., LTD). Furthermore, there cannot be any punctuation marks such as periods, commas between words unless certain spacing is included (like if someone wanted to use their initials; for example: ‘BJS Design’ could become ‘BJSLIMDesign’).
Additionally, no part of the business name must suggest anything about what specific services will be provided because this information should already have been outlined when determining the purpose of your business.
File Articles Of Organization
If you are creating a single-member LLC with yourself as the sole owner, then this form will be sufficient for most states. However, if there is more than one member or you want multiple members in your company (to separate personal assets from liability), then it might be necessary to file articles of the organization. You can find templates to use in some states online.
Keep in mind that no state forms are required, but you will need to create Articles Of Organization if they apply to your company. These steps can be used for an LLC with one or more members.
Get A Federal Tax ID Number
A federal tax ID number is known as an Employer Identification Number (EIN). You can apply for the EIN online and it only takes a few minutes. You will need your Federal Tax ID if you want to open an account with certain financial institutions, such as banks, or file taxes in some states – so this step should not be skipped!
Also, remember that anytime someone is paid through your LLC, they must provide their social security number on form W-909. This protects them from being taxed twice by both state and federal governments.
The same goes for any contractors/freelancers working under your company name. So make sure everyone involved understands these requirements before allowing them to work under the business banner of “LLC”.
Choose A Registered Agent
A registered agent is someone who agrees to receive legal documents on behalf of your LLC. This includes items like lawsuits, tax forms, and other official business-related paperwork that comes through the mail or email.
If you are using a service for managing your company (like BizFilings), then they will automatically provide you with one when opening an account online. However, if you decide to go it alone – make sure there’s at least one person in each state where your LLC operates as the “registered agent”.
Remember to review/sign any business contracts before sending them off! Your lawyer might have different requirements for business contracts depending on your state, so make sure you get them to look over the fine print before allowing anyone to work with your LLC.
Draft An Operating Agreement
An operating agreement is a document that outlines the rules and regulations of your LLC. It should cover how much each member owns in the business, whether they have to pay fees, what happens when one member wants out, etc.
This step can be done after you’ve established the company – but it’s better if you do this before filing any paperwork or opening accounts! This will help protect both members from getting into legal trouble with anyone who works under their name (contractors/freelancers).
Obtain Licenses And Permits
No matter what type of business you are opening, there is always an official license for it! For example – if you wanted to open a restaurant in the state of New York, then your LLC would need their “Food Service Establishment License”. There are also licenses required by any federal government agency (for businesses like banks).
Remember that every city/state may have different rules and regulations when obtaining these types of permits. So make sure someone from each location where your company operates goes over all the specific details before starting up shop!
Setting up an LLC is easy if you follow these seven steps. The process can seem daunting, but it doesn’t have to be. You just need the right information and a little time so that you get everything done properly. Use this guide to find out what needs doing when setting up your business!
