Forming a legal entity that separates your business and personal assets is a smart decision for many businesses, but can be expensive for a start-up to afford. We will show how you can form an LLC without having to hire an attorney. It’s actually pretty easy!
There are two choices of business entities that make this happen which is the corporation and LLC. The corporation is the more complex of the two to set up as there are classes of shares, stock certificates, shareholder meetings, board of director meetings and taking minutes at those meetings. The LLC on the other does not have those complexities and doesn’t really need an attorney to do the filing. We would still recommend having an attorney or formation company guide you to make sure everything is done right, and we go over the basics below, but it isn’t required to have an attorney do your LLC formation.
What About Those Companies that Say They Will Form My LLC for Free?
With some internet research, you will undoubtedly come across come companies that say they will register a free LLC for you. Be careful in working with these companies because no LLC formation can be completely free as there are state fees that have to be paid. Plus a company can’t operate for long without selling something so what typically happens is there are aggressive upsells for things your business doesn’t need and you may end up paying more for the “free” LLC than if you were to even pay to have a formation company help. With that PSA out of the way here are the basic to forming your LLC. The links below take you to the information to form at the state level and to get an EIN.
The following three steps are all it takes to form a limited liability company in your state:
1. Fill out an Articles of Organization form.
2. Mail this form with State Filing Fee to your state’s Secretary of State Office.
3. Get an EIN by filling out form SS-4 and faxing to the IRS.
After retrieving your form, follow the directions below to fill it out.
Common Information For Filling Out Articles of Organization:
1. Name: The name of a limited liability company must contain “limited liability company” or “limited company” or the abbreviation “L.L.C.”, “LLC”, “L.C.”, or “LC”. “Limited” may be abbreviated as “Ltd.”, and “company” may be abbreviated as “Co.”
2. Registered Agent: A Registered Agent, in some states called a “resident agent”, is simply the person designated by your LLC to receive official documents from the state and to be served should the LLC ever be sued. If you are forming an LLC in the state that you live/do business in, then you should use your business or home address (if you work out of your home). A physical address is required and a PO Box is not allowed. Some people find using their home address inconvenient as the LLC address becomes public record. IncFile and LegalZoom offers a low-cost Registered Agent service that comes with a private address for LLC documents.
3. Manager: This question is asking who is going to operate your LLC on a day to day basis. If you are running the LLC yourself, then select “Member” managed. If you are hiring an outside professional to run your company, who will not be a Member, then pick “Manager”.
4. LLC Organizer: This is basically the person who is filling out the Articles of Organization form. By signing the articles of organization as the “organizer”, you are giving an oath that the information in the articles is true and correct.