How to Form a Limited Liability Company (LLC) in the USA

Step-by-Step Guide

1. 1

   Step 1: Locate your state’s LLC laws.

   To do this, follow these steps:
   Visit the Limited Liability Company Center.
   
   The Center provides a citation to each state’s laws governing LLCs.
   
   A citation is the title, chapter, and section of a law, used to locate the specific law within the larger state or federal code.
   
   Choose your state from the list of links and look for the citation to your states LLC laws.
   
   Copy the citation and then run a search for it at your favorite search engine.
   
   For the best search results, enclose the citation in quotation marks, for example, “Ala.
   
   Code Ann.
   
   Tit. 10, ch. 12, §§ 1-6.” instead of Ala.
   
   Code Ann.
   
   Tit. 10, ch. 12, §§ 1-6.
2. 2

   Step 2: Decide in what state you will form your LLC.

   Many business owners will need to form their LLC in their home state, however, some may be able to form an LLC in any state of their choosing.
   
   Follow these guidelines when deciding where to form your LLC:
   Forming your LLC in your home state.
   
   If you live in the United States (“U.S.”), and will be transacting business in your home state, experts recommend you file for incorporation there, as many state laws require LLCs who transact business within the state to register the LLC in that state.
   
   Transacting business generally means owning or leasing office space and having employees within the state.
   
   You can check your home state’s LLC statutes to determine how it defines transacting business, and if you will need to form your LLC there.
   
   Forming your LLC in a state other than your home state.
   
   If your LLC will be internet based, and you do not have a physical location in any state, you may want to consider the tax benefits of incorporating in a state other than your home state.
   
   For more information on incorporating in other states, and which states offer tax incentives, see author Jennifer Reuting’s article on choosing a state in which to incorporate. , The laws regarding naming of the Limited Liability Companies vary from state to state and requirements or restrictions may include:
   That the name end with the designation “Limited Liability Company”, “Limited Company” or an abbreviation of one of the two, such as “LLC”, “L.L.C.”, or “Ltd.
   
   Liability Co”.
   
   That the name cannot be the same as another Limited Liability Company registered within the state.
   
   That the name cannot include certain prohibited words, such as “bank”, “trust”, or “insurance”. , Choose a name for your LLC that complies with your state’s laws governing the naming of Limited Liability Companies.
   
   Nolo Law recommends that your name:
   Be distinctive Be memorable Be easily spelled and pronounced Suggest the products or services you offer Distinguish you from your competitors , If you plan to form a LLC in one state and do business in another, you should check that your name is available in both states, as state law may require you to register your LLC in any state in which you do business.
   
   The Limited Liability Company Center offers a link to each state’s search form, where you can check to see if your name is available. , A registered agent, or process agent, is a person chosen to accept legal service, should your company become involved in a lawsuit.
   
   The process agent must be an adult resident of the state in which you will form your LLC.
   
   You may name yourself as the registered agent, your attorney (be sure to ask him or her first), or hire a service agent.
   
   To find national and local process agents, use your favorite search engine to search “process agent”.
   
   You may also want to check with your Secretary of State’s Office, as it may maintain a list of companies that serve as process agents.
   
   You can locate your state’s Secretary of State website by following the appropriate link on the Law Office of Travis Bowen, PC’s website. , Many states allow businesses to file Articles of Formation or Organization online.
   
   Follow the instructions for forming a new business on you state’s Secretary of State’s website.
   
   You can locate your state’s Secretary of State website by following the appropriate link on the Law Office of Travis Bowen, PC’s website. , An operating agreement is a contract between the members (owners) of the LLC and covers topics such as the initial members and their respective interest in the company, distribution of profits and losses among members, voting powers, procedures for admitting new members and resignation of current members, and rules for holding meetings.
   
   See the Internet Legal Research Group’s for a free Operating Agreement form.
   
   Just choose your state from the list of links. , Unless your LLC is has only one member and you intend to file taxes as a disregarded entity (you will include your business income and expenses on your personal income taxes), you will need to obtain an EIN.
   
   To obtain your EIN online, visit the IRS website here.
   
   You will receive your EIN immediately after submitting the online application.
   
   For complete information about EINs see the IRS publication Understanding your EIN. , LLC’s are state entities, which are not recognized by the IRS for income tax purposes.
   
   Therefore, all LLC’s must choose whether to be classified as a partnership, an association taxable as a corporation, or to be disregarded as a separate entity.
   
   LLC’s with more than one member cannot choose to be disregarded as a separate entity.
   
   If you fail to file Form 8832, your LLC will be classified as a partnership, if it has more than one member, and if it has only one member, as a disregarded entity.
   
   You can find IRS Form 8832 on the IRS website.
3. 3

   Step 3: Review your state’s LLC laws for requirements and restrictions on LLC names.

4. 4

   Step 4: Choose a name for your LLC.

5. 5

   Step 5: Check to see that your LLC name is available.

6. 6

   Step 6: Choose a registered agent.

7. 7

   Step 7: File your Articles of Formation or Organization.

8. 8

   Step 8: Prepare and execute an operating agreement.

9. 9

   Step 9: Obtain an Employer Identification Number (“EIN”).

10. 10

    Step 10: File Internal Revenue Service (“IRS”) Form 8832

11. 11

    Step 11: if required.

Detailed Guide

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