How to Form a Personal LLC
According to the Internal Revenue Service (IRS), many small businesses begin as sole proprietorships, where there is no legal distinction between the business and the owner. All assets and losses attributed to the business are accrued to the owner. This causes the owner to have unlimited liability for all debts owed by the business. In order to minimize the risks associated with a sole proprietorship, small business owners may elect to form a single-member Limited Liability Company (LLC). An LLC offers asset protection similar to that of a corporation to the owner of the company.
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Instructions
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Name your new LLC. Note that your business must have a name that is unique to your state. In order to check the availability of your desired business name, check with your Secretary of State. Additionally, your new company name must end with either LLC, L.L.C., Limited Liability Company or Ltd. Co.
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Create Articles of Organization for your new LLC. The Articles of Organization is a form that acts as a charter for the business and articulates basic information about the LLC. The form needs to include the name and physical location of the company (this cannot be a P.O. Box number), the objective of the business (which can be "to engage in any lawful activity"), the name and contact information of an individual who can accept legal documentation for you, and the name of the commanding member (you). Most states have pre-made Articles of Organization that can be downloaded or filled out on the Secretary of State website. Find a link to all state government websites in Resources.
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File the Articles of Organization form with your Secretary of State. You will also be asked to include a fee for registering your LLC. This amount will vary by state.
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Establish that you are self-employed with the IRS by filing quarterly estimated taxes on Form 1040-ES. Because all assets and taxes are passed from the business directly to the owner, you do not need to submit a separate tax form for your business and yourself. At the end of the tax year, you will submit Form 1040, Schedule C. List your business name on section C of this form.
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