How to Form an LLC Business Entity

by Terry Masters
Most states provide a template to make it easier to prepare your articles of organization.

Most states provide a template to make it easier to prepare your articles of organization.

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Starting a new business is an exciting endeavor when you're properly educated and prepared. Setting up your limited liability company is a state-based process that typically takes a few hours of your time. Most states provide the tools you need to complete the formation paperwork yourself, or you can hire an online legal document provider to handle the process for you.

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Pick a Home State

To set up a new LLC, you must file formation paperwork, often called the articles of organization, with a state business registration office. You can choose any state in which to form your company and request permission from other states to transact business within their territories. Entrepreneurs often consider business regulations, tax obligations and other laws when deciding which state to use as a company's home base. However, it's typically easier for a small-business LLC to file formation paperwork in the state where the company will transact most of its business.

Check Your Business Name

Generally, your LLC name cannot be the same as that of another LLC on file with the state. You must also append some version of "LLC" to the end of it. You can conduct an unofficial search for the name you select on your state's business registration website using its database, or you can pay to have the registration office conduct a pre-filing search for you. The office will only approve your filing if the name on the paperwork is available for use. Although you are not required to do so, you might want to consider registering your business name as a federal and/or state trademark.

Engage a Registered Agent

States typically require LLCs to designate a person or entity with a physical address within the state to accept official mail and court notices. This person or entity is known as the registered agent. An owner, known as a member, can usually act as the registered agent, or the LLC can hire a person or service to assume the role. In some states, the agent must sign a consent form that you need to submit with the company's articles.

Prepare Formation Paperwork

Many states make it easy for small-business owners to set up companies on their own by providing fill-in-the-blank templates of formation documents. You can often download the template for LLC articles of organization from the state's business registration website. The form is typically one or two pages long and requests basic information such as the name and address of the company, the name and address of the registered agent, whether the company will be managed by the owners or outside management and the name and address of the person filing the paperwork. You're allowed to add additional information to your articles based on your business circumstances and the parameters of state laws.

Sign and File the Articles

You must sign and file the articles, paying the appropriate filing fee. Once the state accepts the filing, it stamps an official formation date on the document. This formation document is your company's birth certificate, so you should request a copy for the company's records.