Starting a limited liability company (LLC) is easy. And to make it even easier, we’ve created an LLC formation checklist.
A limited liability company offers the benefits of limited liability protection and tax options for small businesses.
This Checklist for Starting an LLC covers the necessary steps you need to take when you create your LLC.
Recommended: Start your LLC with Northwest for $29 (plus state fees).
LLC Formation Checklist
Step 1: Choose a Name
Once you’ve decided to start a new business, choosing a business name is an important step on the LLC checklist. There are several things to keep in mind when naming your business:
You want your name to be easy to market. This can mean different things for different businesses, but some general tips are to keep names short, memorable, and easy to pronounce. Some business owners also like to have the name be descriptive so that potential customers can easily figure out what the company does.
Each state has its own rules and regulations for business names. Most require the name to be “distinguishable” from any other registered business name in the state, not be misleading about what the company does, and to contain the words “limited liability company,” the abbreviation “LLC,” or something similar.
“Doing Business As” (DBA) Name
You may also want to consider getting a DBA, which would allow the LLC to operate under a different name than its legal one. This can be useful if your business has multiple brands or distinct services.
If your business name is available as a web domain, that’s a big plus. However, there are often creative alternatives if the domain is not available.
Find a Domain Now
Step 2: Appoint a Registered Agent
Most states require LLCs to have a registered agent. A registered agent is an individual or business entity that accepts tax and legal documents on behalf of your business. In some states, a registered agent is also known as a resident agent, statutory agent, or agent for service of process.
A business owner or other individual in the company can be the LLC’s registered agent as long as they meet the following requirements:
- Is 18 years or older
- Has a physical address in the state where the business is formed
- Is available (in person) during normal business hours
However, it is usually a good idea to hire a registered agent service. There are a few advantages to hiring a registered agent service:
- Compliance with the law
- Peace of mind
Check out our Best Registered Agent Services guide for help picking the best registered agent for your LLC.
Step 3: Submit the Articles of Organization
The Articles of Organization is the LLC formation document that you must file with the state. In some states, it’s called a Certificate of Formation or Certificate of Organization. In this document, you’ll list some of the basic information about the company. This can include its address, registered agent, whether it is member-managed or manager-managed, and its owners.
Different states have different forms, which can typically be filed online or by mail, depending on the state. The LLC filing fee varies by state as well, from $40 to $500.
Filing the articles of organization is not difficult, and you can usually do it yourself. Our How to File the LLC Articles of Organization state guides walk you through the process step by step.
If you want professional help, these Best LLC Services can file the Articles of Organization for you.
Step 4: Create an Operating Agreement
An operating agreement is a legal document that outlines the ownership and member duties of your limited liability company.
A handful of states (California, Delaware, Maine, Missouri, Nebraska, and New York) legally require LLCs to have an operating agreement, but it is optional in most states. However, we recommend having one even if it is not required for a few reasons.
First, an operating agreement can help prevent or resolve disputes between LLC owners. And even if your business is a single-member LLC, an operating agreement can bring the company credibility and ensure courts uphold its limited liability status.
Operating agreements usually have at least six main sections:
- Management and Voting
- Capital Contributions
- Membership Changes
You can use our custom free LLC operating agreement tool to create the document in an easy-to-use question-and-answer format. Or, you can download our free operating agreement template if you prefer. If you’d rather not write it yourself, you can also hire an attorney to assist you.
Step 5: Get an EIN
An Employer Identification Number (EIN) is like a Social Security number (SSN) for your LLC. It is sometimes called a Federal Employer Identification Number (FEIN), or Federal Tax Identification Number (FTIN).
You need an LLC if any of the following apply to your business:
- Your LLC has employees
- Your LLC is a multi-member LLC
- Your LLC files excise taxes
- Your LLC withholds taxes for nonwage income paid to a nonresident alien
But even if you own a single-member LLC with no employees, getting an EIN is a good idea. Most banks require that your LLC have one to open a business bank account. Check out our 7 Benefits of Getting an EIN article to better understand why your LLC should have one.
How to Form an LLC
Forming an LLC is easy. There are two options for creating your LLC:
- You can hire a professional LLC formation service to set up your LLC (for a small fee)
- Or, choose your state from the list below to start an LLC yourself
For residents of CA, TX, and FL, choose your checklist:
California LLC Checklist
Step 1: Select Your State
For most new business owners, the best option is to form your LLC in the state where you live and where you plan to conduct your business:
- Alabama LLC
- Alaska LLC
- Arizona LLC
- Arkansas LLC
- California LLC
- Colorado LLC
- Connecticut LLC
- Delaware LLC
- Florida LLC
- Georgia LLC
- Hawaii LLC
- Idaho LLC
- Illinois LLC
- Indiana LLC
- Iowa LLC
- Kansas LLC
- Kentucky LLC
- Louisiana LLC
- Maine LLC
- Maryland LLC
- Massachusetts LLC
- Michigan LLC
- Minnesota LLC
- Mississippi LLC
- Missouri LLC
- Montana LLC
- Nebraska LLC
- Nevada LLC
- New Hampshire LLC
- New Jersey LLC
- New Mexico LLC
- New York LLC
- North Carolina LLC
- North Dakota LLC
- Ohio LLC
- Oklahoma LLC
- Oregon LLC
- Pennsylvania LLC
- Rhode Island LLC
- South Carolina LLC
- South Dakota LLC
- Tennessee LLC
- Texas LLC
- Utah LLC
- Vermont LLC
- Virginia LLC
- Washington LLC
- Washington D.C. LLC
- West Virginia LLC
- Wisconsin LLC
- Wyoming LLC
Visit our Best State to Form an LLC guide to learn more about starting an LLC for people outside of the USA, real estate investors, and online businesses.
Steps After Forming an LLC
After forming an LLC, there are some important things you should do, including:
- Create an operating agreement
- Get an EIN
- Register for taxes
- Get an accountant
- Research and apply for business licenses and permits
- Open a business bank account
- Get insurance
- Establish your web presence
- Publish a press release
To learn more, visit our guide on the important things you need to do after forming an LLC.
LLC Checklist FAQ
How do owners of LLC get paid?
Owners of an LLC get paid in a couple of different ways: either a distribution that passes through to your individual tax return or a reasonable salary and distribution if the LLC elects to be taxed as an S corporation (S corp).