How to Start a Limited Liability Company

The way you start a limited liability company in the United States is by incorporating the company in a state. You may choose the state you want to incorporate in. The limited liability company, or LLC, does not have to operate in a state in order to be incorporated in that state. After you incorporate your company as an LLC, your business become a legal entity, and the members of the LLC have protection from individual liability. Here is how to start a limited liability company.

Difficulty: Moderate

Instructions

Things You'll Need:

• Filing fee

1. Decide which state will provide the most favorable laws for your limited liability company. You may incorporate in the state in which the LLC will operate. However, many people choose to incorporate in the states of Delaware or Nevada because those states have favorable corporation laws.

2. Access the website for the secretary of state’s office for the state you have chosen for incorporation. Guidelines for the incorporation process are typically available on most secretary of state websites. Become familiar with those guidelines.

3. Check to see if the name you have chosen for your limited liability company is available. The name that you choose for your LLC needs to be unique. Most secretary of state websites provide a database of corporate names that you can check to see if the name you want to use has already been taken.

4. Identify who the members of the limited liability company will be. These names are not set in stone, so you can change them after you incorporate. However, it is helpful to identify who the members of the LLC will be for the initial meeting after incorporation.

5. Write Articles of Incorporation. Most secretary of state websites provide forms for writing the Articles of Incorporation that you can download. Complete the form, making sure you supply all of the requested information. You will need to have selected a name for the LLC, identified the registered office (the place where official mailings should be sent) and chosen a registered agent.

6. File the Articles of Incorporation with the secretary of state’s office. Be sure to include the filing fee.

Tips & Warnings

• If you choose to incorporate in another state, you will need to hire a registered agent to receive official mailings. Determine whether the benefits of incorporating in Delaware or Nevada will offset the inconvenience of having to hire a registered agent in the state.
• It might take several weeks to hear back from the secretary of state’s office, so be patient.
• Incorporating is how you start your limited liability company, but incorporation is not the end of the process. Each state requires its LLCs to file annual reports and to maintain certain documents. You will also need to hold an initial meeting and create an operating agreement. Be sure to research the requirements for corporate recordkeeping in the state in which you incorporated your limited liability company.

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