How to Form an LLC

An LLC, or limited liability company, is akin to a partnership but offers the protective legal environment of a corporation. Unlike a corporation, an LLC does not require a large amount of paperwork or fees. While the exact regulations for forming an LLC vary from state to state, the basic rules are constant.

To form an LLC, you must first consult your state's LLC division within the Secretary of State to check the status of your intended business name. If the name you would like is currently being used by another LLC in your state, you cannot use it. In addition to originality, your intended name must also be followed by some reference to being an LLC, such as "Limited Liability Company," "L.L.C.," or "Ltd. Liability Company."

When your name has been approved, the next step to form an LLC is filing your Articles of Organization. This document is simple to prepare, and can usually be completed in just a few minutes. The typical information required includes your LLC's name, address, and the names of the LLC's owners, or members, as they are referred to henceforth. Filing your Articles of Organization typically requires a fee around $100. Some states may charge more, and some may levy an annual tax as well.

Though not usually required by law, writing an LLC Operating Agreement is another measure taken by most who form LLCs to protect the rights of its members. This agreement details the rules for operation, member's duties, and ownership of the LLC.

The above steps comprise what is required to make your LLC official and legal. Beyond these elements, you must also obtain the proper permits and licenses for your specific business in your specific state/district before your operations can be underway.

You are not required to seek the services of a lawyer to form an LLC, but employing a legal expert to read over your agreements and paperwork may help to ensure that your interests are well protected.