If you are an entrepreneur and you do not have an LLC yet, I highly suggest you create one. Even if you don’t do a lot of business yet, it is always smart to create your LLC for future reasons. You have a vision of what you want your business to become, so planning ahead is always the smart option. Filing for an LLC is not hard at all and you can do it very easily online!! Here are a few simple steps for filing your LLC online:
Step 1: Where Should You Organize?
Your LLC’s life begins when you file articles of organization with the secretary of state or an equivalent department of state government. (The federal government does not charter LLCs or corporations.) Several factors should guide your decision on which state is the best for your LLC. Those factors include the following:
The state or states in which your business operates (the most important consideration for most companies)
Initial LLC filing fees
Annual filing fees and annual reporting requirements
State-specific advantages such as privacy rights
As a general rule, if your business is small and operates in and sells products or services in only one state or even just mostly in one state, you should organize your LLC in the state where you conduct business.
But what if your LLC operates or does business in several states? You may be required to register in all the states where you do business-regardless of the state you choose for your organization. States generally require out-of-state LLCs (called foreign LLCs) to register and pay fees in the state in which they are operating as a guest. For example, a Delaware LLC that transacts business in California must register in California as a foreign LLC [and] pay a filing fee in California.
Step 2: Select Your LLC’s Name
At this stage in the organization process, you must choose a name for your LLC. Understand, of course, that you may use a trade name in the public marketplace other than your LLC’s name. This is called doing business as (DBA) a fictitious name. The single greatest consideration when choosing a name is ensuring that no other person or entity is currently using the name. This consideration is guided by two factors. First, your use of a company name may infringe on the trademark or service mark rights of others. Infringing on the trademark rights of others may result in legal complications. Second, the secretary of state’s office will not register a new LLC with the same name as an existing LLC. Keep in mind, however, that a secretary of state’s office will have existing records only for company names in that state-the office will have no records for company names in the other 49 states. Thus, you may wish to search for existing trademarks and LLC names to ensure that your desired name is available.
Step 3: Select the Registered Agent
A registered agent is a person or entity authorized and obligated to receive legal papers on behalf of an LLC. Because an LLC is not a physical person, service of legal papers on an LLC without such a designated representative would be impossible. The registered agent is identified in the articles of organization, but can typically be changed upon the filing of a notice with the secretary of state. The agent can be you, a family member, a corporate officer, an attorney, or a company that specializes in corporation and business services. The registered agent’s name is a public record; if you desire anonymity, hire a professional to perform this service. The agent must have a physical address in the state of organization. Thus, if your business does not operate in the state of organization, you will need to hire a registered agent in that state.
Step 4: File the Articles of Organization
The life of an LLC begins with the preparation and filing of articles of organization. Typically a one-page document, the articles of organization set out the following basic information:
The name of the LLC
The name and address of the agent for service of process, the person or entity authorized to receive legal papers on behalf of an LLC
A statement of the LLC’s purpose
Optionally, the names of initial members or managers
Other optional matters, such as whether the LLC will have an infinite life or be dissolved on some date
To begin the life of an LLC, you file articles of organization with the secretary of state (or other appropriate department) in the state of organization. You must file articles of organization along with a filing fee, which differs in each state.
As a general rule, don’t appoint initial members or managers in your articles of organization unless it is required. The states differ on whether appointment of initial members or managers is required in articles of organization. In California, listing the names of initial managers/members is optional. In Nevada, it’s required. Members and managers can easily be appointed soon after filing. Articles of organization are public documents and thus could reveal the names of an LLC’s members to any member of the public.
Nearly every secretary of state’s web site offers sample articles of organization in either word processor or portable document format (PDF). You should always use the form recommended by the secretary of state, if one is available.
Step 5: Obtain a Federal Tax Identification Number for Your LLC
Because your LLC is a legal entity, federal law requires that you obtain a Federal Employer Identification Number (EIN or FEIN). In addition, most banks require you to give an EIN before opening a bank account. You obtain your EIN by filling out Form SS-4, Application for Employer Identification Number, or by applying online. If you mail the form, expect to wait up to six weeks to receive your EIN. If you fax your form to a service center, you’ll receive your EIN in about five days. You can also obtain an EIN immediately by telephoning an IRS service center during business hours.