How to Organize an LLC

by Carrie Ferland

An LLC, short for limited liability company, is a business classification for companies who want to legally separate their individual and professional interests. LLC formations are not federally recognized, so business owners must organize as a LLC in each individual state where they intend to conduct business. While each state defines separate statewide guidelines for opening, forming and operating as an LLC, the actual process is relatively uniform across all states.

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Step 1

Determine the state where you will organize your LLC. If you are merely reorganizing a sole proprietorship or a small LLC to operate in your state, then choose your state of residency. If you plan to conduct business outside of your state of residency, you will need to form as an LLC in every state where you plan to operate.

Step 2

Decide who will serve as your registered agent in your state(s) of organization. This person or business does not need to be a member of your LLC, but must reside in the state where you plan on conducting business. Identify at least one registered agent for every state in which you plan to organize in; you must name a separate agent for each state.

Step 3

Search the state business registry for the name of your LLC in every state where you plan to organize to determine if it is available for use. If your name is already in use by another business in one state, choose another name for your LLC in that state. You may operate under different names in different states, but try to choose similar names for uniformity to preserve name-recognition across your states of operation.

Step 4

Complete an articles of organization document for every state in which you plan to organize. Many states offer pre-made forms for this purpose, which you can request from the secretary of state or corporate agency. If not, draft your own articles of organization that contains the full name and address of your LLC, the full names and titles of each member, and the name and physical address of the registered agent designated in that state. Also include a short description of the LLC’s main industry and a summary detailing why you are forming an LLC in that state.

Step 5

Make a copy of your articles of organization for each state and file the original, along with the original signed copy of your operating agreement, if you have one, with the secretary of state. There is a nominal filing fee -- on average, between $100 and $500 -- at the time of filing; pay this filing fee in every state where you are organizing your LLC.

Step 6

Obtain an employer identification number, or EIN, from and elect your federal tax classification with the IRS. The IRS does not recognize LLC formations and instead allows owners to choose their own tax classification using IRS Form 8832, Entity Classification Election. After completing and filing Form 8832, provide a copy of your filed form to the secretary of state in each state of organization as proof of your elective tax status.