How to Form an LLC - A Simple, Straightforward Guide - The KZ Group, LLC

Forming an LLC (Limited Liability Company) is not as complicated as most people think. While each state has its own unique list of steps and requirements, you'll find that they have the important things in common. So whether you're establishing your LLC in business-friendly Delaware or in rural Wyoming, it's likely that you'll need to go through the following steps if you want to form an LLC:

1. Choose a business name.

It helps to have a short list of possible business names to choose from before you register your LLC. Some of the business names you want may already be taken, or they might violate a trademark. Don't worry too much about this, though. Most states have a searchable database online where you can see if the business name you want is already being used. Also, remember that your business name must be followed with a designator identifying it as an LLC. Some valid ones include "Limited Liability Company", "Limited Company", "Ltd. Liability Co." and the acronym "LLC".

Once you've selected a valid name for your LLC, don't worry about registering it. Usually, it will automatically be registered once you complete the second step.

2. File your Articles of Organization.

Simply put, your LLC's Articles of Organization is a document containing basic business information such as your business name, address, purpose, and the names of the owners. This is often a ready-made form that you can get from your Secretary of State's office. While you're at this step, it also helps to ask them about the fees and requirements involved in setting up an LLC. This will help you plan for the later steps.

As you file your Articles of Organization, you will be required to pay a filing fee. This is usually inexpensive, but if you want the filing to be expedited you will have to pay a few hundred dollars more. Keep in mind that some states have additional fee requirements. For example, LLC owners in California are also asked to pay $800 in business tax on filing, to be repaid annually.

3. Create an Operating Agreement.

Though operating agreements are not required in all states, it's handy to have them from the start - especially if the LLC will be owned by more than one person. Your LLC's operating agreement should contain information about the role of each owner, how profits and losses will be shared, as well as the operating rules and bylaws of the business.

4. Submit other miscellaneous requirements.

Since business laws vary from state to state, there are probably specific requirements you need to submit depending on where you're establishing your LLC and what kind of LLC you have. For example, if you're starting a business that sells and distributes liquor, you'd need a specific liquor license for that. Other requirements may include zoning permits, publishing a classified ad announcing your LLC, and practice permits for specific professions.

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