6 Simple Steps on how to Register an LLC

Establishing your small business as a Limited Liability Company, or LLC, offers many benefits, from increased credibility to personal asset protection. LLCs provide owners or members limited personal liability if the company experiences legal trouble. Members can include corporations, foreign entities, individuals, and other LLCs, with membership ranging from a single owner to unlimited owners. When you're established as an LLC, it provides your company flexibility with its profit/loss allocation and tax status.  

However, the process of how to register an LLC is different in each state and is often intimidating and complicated. 1-800Accountant offers expert services, with deep knowledge of the nuanced state and other regulations, to help you establish your small business LLC, so consult with a professional today to see how we can help you. Continue reading our expert guide as we walk you through the steps to register an LLC.

6 Steps to Register an LLC 

1. Develop Your Articles of Organization

You'll need to develop your company's Articles of Organization and submit them to your Secretary of State. Among the essential details, you'll include in this document is your company's name. You want to select something that hasn't already been registered and is unique from a branding perspective. Your Articles of Organization also include your company's address, members' names, and your Registered Agent (see below).

Specifically, your company's address can be necessary for taxes and other regulations. Often these four elements can determine the state in which you must register and file taxes for your LLC:

• The company has a physical presence in the state
• In-person meetings with clients are conducted in the state
• A significant amount of your revenue comes from the state
• Your company’s employees work in the state

2. Draft Your Operating Agreement

Your Operating Agreement outlines how the LLC will be run and each member's rights and responsibilities. Think of this as the business plan you and your fellow members (if applicable) will follow when operating the business. Once each member signs the agreement, it becomes a legally binding set of regulations that members must follow. There are six critical components to what your Operating Agreement should include:

1. Member Ownership Percentage
2. Voting Responsibilities and Voting Rights
3. Powers and Duties of Managers and Members
4. Profit and Losses Distribution
5. Meeting Rules
6. Buyout and Buy-Sell Rules

3. Complete the Paperwork for Licenses and Permits

Again, there is much variation and nuance from state to state, but you'll want to complete your state's required license and permit paperwork. Check with your local  Secretary of State's office, a Business Bureau, or a Business Agency for more about rules and regulations specific to establishing an LLC in your state. Remember that you may also need to register your LLC with your local city or county government. 

4. Publish a Newspaper Notice

Though not required in all states, some states require you to publish a notice in your local newspaper announcing your intention to establish your LLC. Note that this notice is different from any newspaper marketing or advertising you might choose to do. If your state requires it, you'll need to publish your notice before filing your Articles of Organization.

5. Hire a Registered Agent 

You’ll want to consult with a Registered Agent, one of the many services offered by 1-800Accountant, who will serve as an official point of contact with the state to receive service of process, legal and state documents, and transmit these communications to your business. All states require your LLC or corporation to have a Registered Agent. 

6. Tax Registrations

Once you've determined where your LLC will be established, you'll need to file the required tax paperwork for that state. Some states require you to file Initial Reports or Tax Board registration within 30 to 90 days after you register in your state. Generally, members of an LLC will have the option to choose between pass-through taxation (similar to partnerships) or corporate taxation.

A domestic LLC with at least two members is considered a partnership for federal income taxation unless members file a Form 8832 and elect to be treated as a corporation. An LLC with a single member is regarded as an entity separate from its owner for income taxation unless the member files Form 8832 and elects to be treated as a corporation. Regarding employment tax and certain excise taxes, a single-member LLC is classified as a separate entity. 

LLC Formation FAQs

What are the benefits/disadvantages of registering an LLC?

Benefits include choosing between a member-managed or manager-managed company, limited liability for members, fewer paperwork requirements (compared to other business structures), and flexibility with profit/loss allocation and tax status. One disadvantage is that in some states if a member leaves an LLC, you'll need to dissolve that LLC (with the option to launch a new LLC with remaining/new members) and pay a termination fee. Another disadvantage is that members must pay a self-employment tax if they file taxes as a general partnership. 

How much does it cost to register an LLC?

The cost to register your LLC will vary by state, but you should expect to pay at least $300 to get your LLC up and running. 

What are Articles of Organization for an LLC?

Your Articles of Organization lay out the basics as you and other members (if applicable) begin establishing your LLC. This document will include your company name, address, member names, and the registered agent and will be filed with your local Secretary of State's office. 

What documents are needed to form an LLC?

This is a tricky question and doesn't have a simple one-size-fits-all answer since there is so much nuance from state to state. Your best bet is to educate yourself about the rules and regulations specific to your state (and potentially your city and county government) or hire a professional to help you with the process. 

How 1-800Accountant Can Help You Start Your LLC 

Running a business is hard enough so let us eliminate the hassle of establishing your LLC. We can even help with your taxes while we're at it. Schedule your free consultation with one of our entity formation experts today.