The limited liability company, or LLC, is a relatively simple business entity that has limited liability and flexible tax treatment without all the paperwork associated with starting and operating a corporation. LLCs are creatures of state law, and as such the requirements for forming one can be found in each state's business corporation act. While many aspects of corporate law can be daunting, the requirements for organizing a business as an LLC are usually easily accessible for the do-it-yourself entrepreneur.
Fit your business needs with the right LLC package
Choose a name for your LLC. Check with the secretary of state, the secretary of corporations or a similar official in your state to ensure that the name is available. Many states have a website where you can determine whether another business in the jurisdiction is already using the same name; all jurisdictions require that your LLC have a unique name.
Draft your LLC's articles of organization. Search the website of your state's secretary of state or equivalent official to determine whether the state has provided form articles of organization in your jurisdiction. State-provided forms contain blanks for you to fill in such important information as the name of the LLC, the names and addresses of its members and managers, its registered agent for service of process and its primary business location. As mistakes in the creation phase of your LLC can result in the loss of limited liability, make sure that you comply with every letter of the law. If your state has no forms available, consider purchasing them from a reputable online source.
File your articles of organization with the secretary of state or similar official, and pay the associated fees, which range from less than $50 to over $500. Your state may also require you to file an operating agreement at the same time. Before beginning operations, check with the county or municipality in which your principal office will be located to see if you must obtain a business license to operate there; some municipalities require business license fees even if your LLC will not be engaged in professional services. Also check to see if your state department of internal revenue requires businesses to pay for a "privilege" license to operate in the state. The privilege license fee is a form of a tax that is not necessarily required for all businesses in all jurisdictions.