If you’re looking to form an LLC, you probably already know that there are a plethora of options. Many entrepreneurs are uncomfortable with the idea of registering a limited liability company themselves, but also don’t have the budget to hire an attorney.
If you fit this description, don’t worry! There are reliable and affordable LLC formation services that can take care of the paperwork at a fraction of what an attorney would charge.
This guide outlines the 7 best LLC services online and provides detailed reviews of what sets them apart. Which is the best LLC formation service for you?
If you’re looking for the best LLC website overall, we recommend ZenBusiness. They’re a Texas-based company that has helped form more than 300,000 businesses since their inception in 2015 – with positive reviews online to back it up.
What’s unique is that ZenBusiness is a socially conscious organization, focused on doing good while growing as a company. They have a partnership with Kiva.org to help lift people out of poverty through financial lending and loan money to help women- and minority-owned businesses get off the ground.
- ZenBusiness has the best starting package available that includes all the necessities when creating an LLC. At just $39 (normally $49, but we have a discounted special offer) this Starter package includes LLC formation, 12 months free registered agent service, and a customizable operating agreement template. To get all of these features with most other LLC services, you would have to pay a lot more.
- Customer feedback is a major strength for ZenBusiness. They have 8,200+ reviews online and nearly all of them are positive.
- In their efforts to help you start and maintain your business, they offer to take care of annual report filing and other ongoing LLC maintenance. This is part of their Worry-Free Compliance feature (included in the Pro package).
If you want to form an LLC with a socially conscious provider and get the best overall value, choose ZenBusiness.
Want to learn more? Read our full ZenBusiness LLC review.
Northwest Registered Agent also offers a great LLC formation service, with their premium customer support totally setting them apart. They’ve been forming LLCs since 1998 and are easily the runner up as the best LLC formation service.
Northwest typically charges at least $225 to form an LLC. However, thanks to our discount offer, they’ll match ZenBusiness’ $39 price point for the combination of LLC formation and a year of registered agent service.
- Northwest has no upsells, making the LLC formation process very straightforward. Most other services (like LegalZoom) will try to get you to buy add-on after add-on, while Northwest does not.
- Out of all the LLC services we reviewed, Northwest has the best customer support available. If you ever have an issue, simply call their number to get any question answered quickly by someone friendly and knowledgeable.
- They include a full year of their namesake registered agent service with the LLC formation package, which costs $125/year if purchased separately. Northwest puts considerable effort and care into this service and was the first major registered agent service provider to locally scan all documents.
If you place a high value on exceptional customer support and aren’t particularly swayed by ZenBusiness’ large volume of positive customer reviews, choose Northwest.
Want to learn more? Read our full Northwest LLC review.
Another good LLC service is IncFile, with a truly free LLC formation service that only requires you to pay your state fee.
IncFile is a well-known choice, with more than 500,000 businesses formed since they opened in 2004. They also have a variety of features to suit any entrepreneur’s needs, and a number of advantages to make them a good service to form an LLC.
Keep in Mind: Even though their free formation LLC service is a great deal, you’re going to deal with more upsells and potentially higher overall prices as a result.
- Even considering that its base LLC formation package is free of charge, IncFile includes several valuable features such as a full year of registered agent service, lifetime company alerts for filing deadlines, and more.
- They have more than 32,000 online customer reviews, and nearly all of them praise IncFile for their efficient services.
- IncFile has great customer service with helpful support reps. They offer phone, email, and chat support, so help is never more than a call or a message away.
If you’re starting a business on an extremely tight budget and need a free LLC formation service, choose IncFile.
Want to learn more? Read our full IncFile LLC review.
Like IncFile, Inc Authority also offers a free LLC service in addition to paid packages. Inc Authority has been around since 1989, and they’ve formed more than 130,000 business entities over the years.
Inc Authority’s platform isn’t the most intuitive or user-friendly LLC website we’ve ever used, but they do have several advantages that still make them well worth a look for entrepreneurs on a budget.
Keep in Mind: Even though their free LLC service is a great deal, if you want additional features, you’ll end up paying higher prices than other options on this list. Their cheapest premium package starts at $399.
- Even though they offer LLC formations for free, every customer who uses this service still receives one year of registered agent service at no cost.
- Customer feedback is a big pro for Inc Authority. They have nearly 10,000 reviews available online, and nearly all of them are positive. Customer satisfaction is clearly quite high for Inc Authority.
- One issue with Inc Authority is that they do not provide refunds for any reason, so if you purchase any of their paid services, you should make absolutely sure that you’re making an informed purchase.
If you don’t have a ton of money to spend on business formation services, Inc Authority is the only company in this industry other than IncFile that offers LLC formations for free (as long as you pay your state fee).
Want to learn more? Read our full Inc Authority LLC Review.
LegalZoom has more brand power than any other company in this industry, with a wide reach all across the country. They handle huge volumes of LLC formations, and their experience is second to none.
They can’t match the value per dollar offered by ZenBusiness or the top-notch customer support of Northwest Registered Agent, but they’re an incredibly popular service provider.
- LegalZoom has helped form more than 2 million businesses since 1999. Not many competitors can keep up with a workload like that.
- They have extended customer service hours that can be a lifesaver for busy entrepreneurs. They’re available until 10pm ET every weekday, and they’re even open weekends until 7pm ET.
- LegalZoom’s ordering process includes a very long series of upsells. Before you’re able to reach their package selection screen, they’ll put you through upsells for their registered agent service, federal tax ID (EIN) acquisition, a business license research package, business tax software, a legal services subscription service, and compliance assistance. If you accepted all of these upsells, you would be on the hook for $1,080 over the course of your LLC’s first year ― and that doesn’t even include the cost of your actual state filing fee.
If experience and using a well-known company are important to you, and you don’t mind navigating past some upsells, consider starting an LLC with LegalZoom.
Want to learn more? Read our full LegalZoom LLC review.
Next up is Rocket Lawyer, a service that provides a host of legal features in addition to LLC formation. If you’re in a situation that requires discussing sensitive legal matters with an LLC attorney, Rocket Lawyer is likely a great fit for you.
- Their members enjoy many advanced features with their LLC formations, including attorney consultations, access to an extensive document library, and much more. A legal services membership can even get you a free LLC formation, as long as you keep up with your $39.99 monthly subscription fee. However, for non-members, Rocket Lawyer’s LLC formation service is barebones and overpriced.
- They’ve served more than 7 million business clients and 25 million total customers since 2008. It’s a highly impressive volume of customers considering they’ve been around for a little over a decade.
- Rocket Lawyer’s 100% satisfaction guarantee ensures that if you’re unhappy for any reason within 30 days, they’ll either fix the issue or give you your money back.
For customers who don’t subscribe to their legal services subscription, Rocket Lawyer isn’t as worthwhile as the other good LLC services in this guide, as their $99 base rate doesn’t include many features. However, if you also require legal assistance, Rocket Lawyer could be an excellent choice.
Want to learn more? Read our full Rocket Lawyer LLC review.
With more than 60,000 business formations since they opened in 2001, MyCompanyWorks fits the bill as a mid-size company in the LLC services industry. They have the experience to do the job right, without making you feel like you’re just a number.
Plus, there are about 3,900 MyCompanyWorks reviews online, the vast majority of which are of a positive nature.
- With a $59 base rate, they’re not the absolute cheapest option out there, but they’re quite affordable. We will note, however, that they do not include free registered agent service with every package like a handful of other LLC services on this list do. It is only included in their $199 Entrepreneur and $279 Complete packages.
- MyCompanyWorks’s customer support reps always get back to you quickly. During business hours, they reply to most voicemails and emails in less than 20 minutes. Some competitors can take a full day (or even longer) to get back to you.
- Their Startup Wizard LLC formation checklist is a convenient way to navigate the formation process, ensuring that you don’t miss any crucial compliance steps.
If a proven track record and quick-response customer support are important to you, check out MyCompanyWorks.
Want to learn more? Read our full MyCompanyWorks LLC review.
Which Is the Best LLC Service for You?
We totally understand if seeing all of these options feels overwhelming, especially since they look so similar at first glance. At the end of the day though, ZenBusiness and Northwest are the best-rated LLC formation services online.
Both LLC websites give you excellent bang for your buck, form a business quickly, are reliable, and provide easy-to-use interfaces.
When to Choose ZenBusiness:
If you want the best overall value from a socially conscious company.
When to Choose Northwest:
If you want the best possible customer support from an established company.
The Pros & Cons of LLC Formation Services
- It doesn’t matter if you understand the legalities of starting an LLC or not. LLC creation services save you time and effort by taking care of the process for you.
- Most company formation services have an online dashboard tool to keep you updated regarding important government deadlines, ensuring you never miss a filing.
- If you run into any problems, or even if you just have a simple question, LLC websites have extensive phone and email support systems. If you go the DIY route, you will have to contact the state directly which can take much longer to get a reply.
- All of these incorporation services will save you hundreds of dollars over hiring an attorney to form your LLC.
- If you have the time and capacity, you can save money by starting an LLC on your own.
- On the other end of the spectrum, a lawyer has specialized insights that you’re not going to get with most online incorporation services.
Frequently Asked Questions
about the top services to start an LLC
I’ve Heard the Most About LegalZoom. Why Aren’t They #1?
LegalZoom is the most well-known LLC formation service online, thanks to their massive advertising budget and impressive customer volume.
How Do Online LLC Services Work?
Using an LLC formation website removes much of the hassle from the business formation process. With these services, all you need to do is provide them with the name, location, and industry your business operates in, along with some info about yourself and your registered agent.
The service then creates your articles of organization and files them with your state to create your new LLC.
Are LLC Formation Websites Legit?
Absolutely. There are quite a few reputable companies offering LLC formation service these days, including the top 7 top LLC services you see above.
In fact, while we certainly have our opinions about which ones offer the best pricing and features, every one of the incorporation services we discuss on this website is entirely legitimate and trustworthy.
Do I Have to Use a Service to Form an LLC?
The DIY route is always an option, and quite a few entrepreneurs do choose to form their own LLCs without the assistance of a business incorporation service. If this is something you’d like to look into, check out our free guide to creating an LLC.
There are several steps involved if you’re going to form an LLC on your own. The most important phase of this process is preparing and filing your articles of organization, as this document formally creates your LLC with the state.
The information required varies from state to state, but you’ll generally need to provide them with some basic information about yourself and your business. You will also need to choose a name for your business, designate a registered agent, obtain a federal tax ID number (EIN), create an operating agreement, and more.
Does Using an LLC Service Give Me More Legal Protection or Privacy?
In some ways, using an LLC service does protect your privacy, especially if you choose to also have that company serve as your registered agent.
This is due to the fact that, if you serve as your own registered agent, your personal address will often become part of the public record. Using a registered agent service not only provides the privacy of using the agent’s business address as your own, but it also significantly cuts down on junk mail.
Does It Matter If I Choose the Cheapest Package?
With any of these packages ― and with any of these service providers ― you will receive the full formation of your LLC.
It doesn’t matter if you purchase the most affordable or most expensive package unless you’re also interested in getting some advanced features with your formation.
There are also some services (like LegalZoom and ZenBusiness) that base your turnaround times on which package you buy, but this is rather uncommon.
Are There Any Risks to Using an Online LLC Service?
We would actually argue the exact opposite, that there are many more risks to forming an LLC on your own. With an LLC formation website, you can rest assured that your business is formed correctly.
These companies form hundreds or even thousands of LLCs every day, so they have the expertise to form a compliant business entity.
Do You Have a List of All the Good LLC Filing Services Online?
Yes! We’ve reviewed all of the industry’s top LLC formation services, as well as many of the smaller providers, in an effort to help you decide which LLC service provider is the right choice for you. Here is a list of these LLC services and a quick review of each option.
ZenBusiness is the LLC filing service that strikes the perfect ratio of the cost to start an LLC ($39, thanks to our discount) with the features included. They are one of our favorite options and the service with the best overall value. Plus, they are a social enterprise with a focus on making a positive impact while helping entrepreneurs set up an LLC online.
Northwest Registered Agent is a premium service provider with a reasonable price point that beats many of the more economy-minded LLC services — as long as you’re using our discount, that is. Their $39 price point includes a full year of registered agent service, as well as Northwest’s next-level personalized customer support.
IncFile strikes a great balance between being a free LLC filing service and having a strong selection of features, including a full year of registered agent service. They also have fantastic customer reviews, and overall they’re a great service to form an LLC.
Like IncFile, Inc Authority has an LLC formation package that’s entirely free of charge. With a year of free registered agent service included, along with thousands of positive reviews, Inc Authority presents a very appealing package. That said, it doesn’t stand out in any specific way that would make us recommend Inc Authority over IncFile.
LegalZoom is the unquestioned leader for brand power and name recognition in the LLC services industry. They have millions of business customers, and their advertising reach is tremendous. Their prices are a bit higher than the companies we listed ahead of them, but they have the longest customer support hours of any LLC service provider, and they also offer a 100% money-back guarantee.
Rocket Lawyer does offer standalone LLC formation service, but their main draw is in their comprehensive legal services subscription. All new subscribers receive LLC service at no extra charge, and even though there’s a $39.99/month fee, they do offer a free one-week trial.
With responsive customer service and strong client feedback, MyCompanyWorks is a customer-focused company providing reasonably priced LLC formations. They return most phone calls and emails in just 20 minutes during business hours, which is a big advantage compared to some competitors that can take a full day or more.
If your state has any further compliance requirements beyond the standard elements of LLC formation ― like initial reports or publication ― BizFilings is one of the only popular LLC formation providers that offers these services. They also include six months of registered agent service in all of their LLC packages.
The big advantage for Nationwide Incorporators is that all of their LLC formations are either drafted or reviewed by a business attorney before they’re filed with your state. Their pricing isn’t great and they’re not as tech-savvy as many competitors, but Nationwide Incorporators is still an excellent option if their “attorney-reviewed” services appeal to you.
Is longevity an important attribute to you? If so, look no further than Incorporate.com. They’ve been around since 1899, and they’ve served more than 750,000 businesses since then. They also offer an impressive guarantee that pays you up to $75,000 if they make an error with your LLC filing and fail to correct it.
MyCorporation is the best option for entrepreneurs who want to bundle annual report service in with their LLC formation. For $99 + $34 shipping, they offer LLC creation service plus a year of managed annual reports, which is the best bargain in the industry for this combination of features.
CorpNet doesn’t stand out in any one specific way, but they’re a well-rounded formation service with few negative attributes. They have reliable customer support, good client feedback, fair price points, and a 100% satisfaction guarantee.
13) Swyft Filings
There are very few LLC services that can beat the $49 price point offered by Swyft Filings, and with a 100% satisfaction guarantee backing up their low prices, it’s easy to see why they’re a popular choice. If you’re on a tight budget, they’re an even better option because they allow you to pay for your formation in two installments. However, Swyft Filings doesn’t include many valuable features, keeping them further down the list than many competitors.
They might not be the most exciting option for basic LLC formations, but if you need advanced features, they’re one of your top options. Direct Incorporation offers trademark protections, full-service web design, logos and graphic design, and much more. They also have a legal services subscription, so they really do have a strong selection of advanced features available.
Harvard Business Services – Delaware
If you’re forming an LLC in Delaware, Harvard Business Services is a great option. They have excellent customer feedback with thousands of reviews across the web, and they offer registered agent service for just $50 per year, which is a really low rate.
Is My State’s LLC Registration Fee Included in the Prices Above?
No. There are different LLC formation fees in all 50 states, so you’ll need to add your state’s fee to the listed price points. In some states, this is as little as $40, but in others, you might need to pay a fee of several hundred dollars.
Want to see how much it will cost to form an LLC in your state? Check out our state-by-state guide.
How Much Would it Cost to Have an Attorney Start My LLC?
Depending on the nature of your LLC, as well as the legal requirements in your state, there is some variation here. In general though, it will likely cost at least $1,000-$1,500 to hire an attorney to form your new LLC. It could easily cost more than that as well, possibly as much as $3,000 or more.
Should I Reserve My LLC Name Before Starting an LLC?
There are only two situations where it’s advisable to reserve an LLC name ahead of time. One is if you’re not yet ready to form your LLC, but you want to make sure that the business name you want is available when you do take the next step.
Other than that, there are states like Alabama that require you to make a business name reservation before you start the LLC formation process. In general, reserving a name ahead of time is not necessary for the vast majority of entrepreneurs.
What LLC Service Helps with NY Publication Requirements?
If you’re forming an LLC in New York, an LLC formation service that also offers to take care of New York LLC publication requirements might be the best bet. Unfortunately, there aren’t many companies that offer this service.
However, there are a few services that do, including ZenBusiness and BizFilings.
Do Services That Start an LLC Help With Other Things Too?
Yes, most LLC formation websites offer a number of other online business services. Even the most basic and cheap LLC formation services also include a business name availability check to ensure that your business name is available.
While the exact services offered by these companies vary, you’ll often see offers for registered agent service, EIN acquisition, annual report service, foreign qualifications, business licensing research, and more.
Should I Set Up an LLC in a State With a Lower State Fee?
It’s not difficult to find articles online about how you should form your business in Delaware because this state has many advantages for businesses, or Nevada because they provide tax breaks. In our opinion, it’s almost always a better idea to simply form your business in the state you’ll operate it in.
This avoids all kinds of complications and hassles that often undermine the usefulness of starting an LLC.
Upsells Drive Me Crazy. Which Service Is the Least Annoying?
In our opinion, Northwest Registered Agent does a fantastic job of keeping the upsells to a minimum. They never pressure you into upgrading your LLC formation package, or adding unnecessary features to your order.
While some competitors will stop at nothing to pile on the upsells ― like LegalZoom, a company that attempts over $1,000 of upsells on their LLC service order form ― Northwest does not do this at all.
Should I Buy an LLC Kit?
Many companies include what’s commonly referred to as an “LLC kit” with their business formation packages. To be clear, we rarely advise purchasing these kits. There is no legal requirement to have this binder or seal, as the benefits are strictly aesthetic.
What Is a Registered Agent? Is An Agent Service Worth Using?
A registered agent is required to form an LLC and is a person or business entity that is responsible for receiving your important government documents.
For example, if your business is sued, the state will send the service of process to your registered agent, who then alerts you to the delivery and forwards it to you.
While you are legally able to serve as your own registered agent, we strongly recommend using a service instead, because a registered agent service protects your personal privacy, cuts down on your junk mail, and ensures that you never miss an important delivery.
That said, a few LLC services like ZenBusiness, Northwest Registered Agent, and IncFile include this service for the first year free, then between $99-$125 each year after if you decide to keep using the service. You can cancel this at any time.
If an LLC Service Is the Organizer, How Do I Own My Business?
The LLC organizer is simply the term used to refer to the person who sets up the business.
In other words, the organizer has no ownership interests in the business, unless one of the owners is also serving as the organizer. Once the LLC is formed with the state, the organizer resigns their role, and all control of the business is assigned to its owners.
When Is the Best Time to Start an LLC?
We think you should start an LLC before you begin conducting business. While it is entirely legally acceptable to operate your business as a sole proprietorship or general partnership before forming an LLC, doing so subjects you to a number of risks that LLCs don’t have to worry about.
For example, informal business structures don’t have limited liability protection, so any lawsuit filed against the business can include the owner’s personal assets as well as the business assets.
What Are the Overall Costs for Starting an LLC Online?
All entrepreneurs are required to pay state fees for LLC formations, no matter how the business is formed. If you use an online LLC service, you will also be required to pay that company’s in-house service fees.
- With our ZenBusiness discount, you will pay $39 + state fee.
- With our Northwest Registered Agent discount, you will pay $39 + state fee.
- With IncFile, you only need to pay the state fee.
We also recommend using a registered agent service, which has an annual fee attached. All told, these fees can add up quickly, but our top three picks all keep your costs as low as possible, especially for the first year.
Is the LLC the Best Business Entity?
Different businesses have different needs. Therefore, it’s impossible for us to make any blanket statements for a question like this.
For many companies and small businesses, an LLC is the perfect business entity, but for some larger or more complex businesses, the corporation has some advantages that the LLC can’t match. In general though, we strongly prefer LLCs to informal entities like sole proprietorships and general partnerships that don’t have any personal asset protection.
Do I Need to Be in the USA to Set Up an LLC?
Nope! You don’t need to be physically present in America to form an LLC. You also don’t need to be an American citizen or resident. Just about anyone can set up an LLC, which is part of the reason this is such a popular business entity type.
Customer Reviews Comparison
One of the most important aspects of any LLC formation service is the customer feedback the company receives.
To help you analyze each company’s customer reviews, we decided to create this customer feedback comparison section that breaks down how these companies stack up next to each other in this crucial area.
LLC formation services can have customer feedback collections that vary considerably in both quality and quantity. With this in mind, we created the following comparison in an attempt to make it as easy as possible for you to compare these companies in an apples-to-apples manner.
- ZenBusiness: 8,262 reviews / 4.7-star average score
- Northwest Registered Agent: 297 reviews / 4.5-star average score
- IncFile: 32,114 reviews / 4.8-star average score
- Inc Authority: 10,752 reviews / 4.7-star average score
- LegalZoom: 7,331 reviews / 4.3-star average score
- Rocket Lawyer: 7,794 reviews / 4.7-star average score
What You Should Look for in Good LLC Websites
There are so many different things to consider when choosing the best LLC service for you ― it’s tough for us to completely say “This service is the best and everyone should use it.”
With that in mind, let’s talk about a few of the most important aspects of deciding which company creation service you should use — and what criteria we use to review and compare each option.
Overall Value (AKA Pricing and Features)
Low prices are always attractive, but you need to make sure you’re getting the perks and features you want. For instance, does your chosen LLC filing website include registered agent service, or are you required to purchase it separately? Also make sure you’re not paying for anything you probably don’t need, like a symbolic LLC kit and seal.
Service vs Competition
Check out what the competition has to offer. While discounts in the LLC service space are rare, there are added perks like a year of registered agent service or a free operating agreement. Evaluate how much value they add ― not just in a vacuum, but for you.
This is an aspect that we think far too many entrepreneurs overlook. Some of the industry leaders have such a high customer volume that it’s impossible to get LLC service custom-tailored to your individual needs. You can end up feeling like you’re just a statistic, rather than a valued customer.
Does your chosen service provider have a history of success, or do they register lots of customer complaints? Always look into the company’s reputation, and check out their customer feedback to get a better feel for what their client experience is like.
Customer Support Quality
Do they offer phone support, or is it just web-based chat and email? What are their availability hours? Do they outsource their customer service to call centers, or do they handle it in-house?
How to Start an LLC on Your Own
If you’d like to see what it’s like to form an LLC on your own, look no further. All the information you’ll need is right here. By the end of these 5 steps, your LLC will be up and running, ready to take on the world.
1. Choose an LLC Name
This is your LLC’s identity, its brand, its customer recognition. It goes on signage, advertisements, and business cards. Needless to say, your business name is important.
As with most of the steps listed here, LLC name guidelines vary from state to state, but there are a few basic, fairly universal rules.
First, your name needs to be original and can’t match any other name already registered with the state. Plus, each state has certain restricted or prohibited terms, usually words like “bank” or “insurance” that apply to specific business types, profane/vulgar words, or words that imply governmental affiliation.
But once you’ve decided on a name and confirmed that it meets the state’s requirements, lock it down right away! Until your business name is officially approved by the state and you complete your formation filing, other LLCs can still take it. It’s a first-come, first-served world.
The good news is that many states allow you to reserve your company name for a nominal fee until you complete the formation process.
Most state resource websites have free name availability searches, and you can also conduct a name check request by mail. Be aware that, for some business types, you may need to run a secondary check with the Department of Revenue, Secretary of State, or U.S. Patent and Trademark Commission.
2. Designate a Registered Agent
The state government needs a point of contact for your LLC, someone who can handle official, sensitive documents, maintenance requirements, and lawsuits. This person or company is called a registered agent.
When a company, individual, or government entity seeks formal contact with your business, they will send any relevant documents to your agent, who makes note of the receipt and forwards the correspondence to you right away.
On the surface, a registered agent sounds a bit like a “middle man for middle man’s sake.” However, without an agent, a noncompliant business owner could hide behind the excuse that “I wasn’t aware anything was wrong,” or “I never heard anything about it.” On the flip side, without an agent, a company that hasn’t done anything out of line could be sued without ever knowing it.
The registered agent provides a happy medium so that there is verifiable proof that all relevant documents were both delivered and received. This is an important responsibility, as your agent must be available during all standard business hours to notify you when they receive a document on your behalf and keep you updated on state filing deadlines.
Don’t try to go without a registered agent! Doing so can warrant severe fines and cause your LLC to lose its good standing with the state. Prolonged activity without an agent can even result in your LLC’s administrative dissolution.
Besides, it’s relatively easy to find and appoint an agent. Typically, the only requirements are that they are an individual with a physical, in-state address, or a business entity authorized to do business in the state. Often, business owners will appoint an attorney or professional registered agent service, but family and friends are viable options too. All 50 states even give you the option of appointing yourself.
Even in states where you can serve as your own registered agent, we think it’s still a good idea to have a third-party company or individual handle it for you. Taking on the role yourself would make your personal address publicly available, and require your availability during all business hours, making days off and vacations tricky.
With a third-party registered agent, you can travel around making business deals or taking personal trips without the fear of missing important documents. In short, even if your state doesn’t require you to hire an external registered agent, there are plenty of reasons why we still recommend it.
3. File With Your State
You’ve laid the groundwork for your LLC through late-night brainstorming sessions, coffee break musings, and copious note taking. Now it’s time to build the proverbial house by officially establishing your LLC with the state.
After choosing a name and registered agent, it’s time to prepare and file your Articles of Organization (sometimes called the Certificate of Organization or Certificate of Formation). This document is the most important part of the LLC formation process, but have no fear.
These are relatively simple documents that require basic information about your business — things like contact info for your new LLC, the name and address of your registered agent, etc. This is what formally puts your LLC on record.
Though the form’s details, appearance, and filing options vary between states, most often, they will ask for the following information:
- Name and address of your LLC
- Nature of business conducted by your LLC
- Name and address of your registered agent
- Names of owners and members of your LLC
Almost every state has an official form or template for your Articles of Organization, most of which include filing instructions. And usually, you can find these forms on the Secretary of State website.
In most states, you can file your Articles of Organization via mail, but filing options and rules are different for each state. Some will allow you to deliver your documents in person or by fax. Most also offer online filing these days (some even require it). It’s important to familiarize yourself with your state’s filing procedures, as an improperly prepared or filed form risks being rejected.
4. Get an EIN
Taxes might not be fun, but they’re a part of life, and your business will need to prepare for them by acquiring a federal tax ID number, also known as an Employer Identification Number (EIN).
Think of the EIN as a Social Security Number for your company. When you file personal taxes, you need to identify yourself using your SSN, and the EIN works the same way.
Most businesses need an EIN because it allows you to hire employees, open business bank accounts, file taxes, and more. In fact, the only common business type that doesn’t require one is a sole proprietorship with no employees.
The primary reason to obtain an EIN is federal and state compliance, but having one also provides some valuable assurances for your company. For example, without an EIN, you would need to use your personal Social Security Number for business purposes, which could lead to a serious privacy breach. Beyond that, you often need to use an EIN to acquire business licenses and permits or conduct certain types of business banking transactions.
Acquire an EIN by completing and mailing the physical form or simply applying online through IRS.gov. Even though your EIN carries a lot of weight, the filing process is pretty simple, and if you complete it online, you’ll receive your number immediately.
5. Create an Operating Agreement
Without established rules, structure, and procedures, your LLC could fall into chaos, dealing with member disputes, money issues, and lawsuits. Not a pretty sight. But you can easily avoid this bad dream by adopting an operating agreement.
In an LLC operating agreement, you’ll lay out the structure of your business, outlining ownership rules and operational standards that will help it run smoothly and efficiently. In addition, the operating agreement will help distinguish your personal assets from the LLC’s, protecting them if your business is sued.
A majority of states actually don’t require an operating agreement, but it’s still a highly important document, crucial to your LLC’s future success, so we strongly recommend drafting one. Regardless of your business purpose, your operating agreement should include the following:
- The identities and roles of each LLC member or owner
- The members’ rights, responsibilities, conduct, voting power, and percentage interests
- Allocation plans for any financial profits and/or losses
- An outline of LLC management structure (whether it’s managed by members or designated managers)
- Guidelines for holding meetings and taking votes
- Buy-sell provisions to determine a course of action to replace a member, if necessary
- Procedures for dissolution and allocation of remaining assets
One of the operating agreement’s most vital functions is defining responsibilities and relations between members. So, if you’re starting an LLC with business partners, it will prevent confusion and arguments down the road, maintaining the company’s internal well-being.
Even for single-member LLCs, it’s nice to have an operating agreement because it can help your case if your limited liability status is ever challenged in court. Essentially, it shields your personal assets by designating your company as a separate entity from you as an individual.
In case it wasn’t clear enough, we’ll say it again: the operating agreement is incredibly important! By creating one, you’re doing a great service for your LLC, ensuring its future stability, efficiency, and protection.
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