How to Establish a Limited Liability Company
To establish a Limited Liability Company (LLC) you will need to file the appropriate formation documents with the state where the LLC will operate. In addition, you will need to request a federal tax ID and various business licenses and permits. The life of an LLC is established upon the state's acceptance of a company's LLC formation documents.
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Instructions
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Select a business name. As explained on the Findlaw website, you will need to choose a business name that complies with the LLC rules of the state where the business operates. The name of the LLC must not be similar to that of another registered entity in the same state. According to the Citizen Media Law Project website, the name of an LLC must include the words "limited liability company," "limited company," or the acronym "LLC." Conduct a name availability search with the state where the limited liability company operates. Many states provide a name availability search tool on their secretary of state websites.
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File articles of organization. Many states have fill-in-the-blank articles of organization on their secretary of state websites. Depending on the state, articles of organization may be filed by fax, mail, online or in person. The articles of organization must contain information such as the name and address of company managers or members, as well as the purpose for establishing the limited liability company. Pay the filing fee, which may range from $70 to $200, depending on the state.
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Apply for an Employer Identification Number (EIN). All limited liability companies must get a federal tax ID (EIN) number from the IRS. Limited liability companies that apply by phone or online will receive an EIN for immediate use. A limited liability company that applies by fax may wait up to four business days to receive an EIN. Applying for an EIN by mail takes up to four weeks.
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Register for business taxes in the state where the LLC operates. In most cases, an LLC must register with its state's department of revenue. The tax permits and licenses a limited liability company needs vary depending on the business type. For example, a limited liability company that sells products must obtain a seller's permit, as well as a sales and use tax certificate from the state where it operates. Many states have an online tax registration form that simultaneously registers an LLC for all tax permits and licenses. Provide information regarding the type of business, as well as the limited liability company's federal tax ID number.
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Apply for local and state licenses. The business licenses and permits required to establish an LLC vary depending on the nature of the business. For example, an LLC that operates from home may not need anything more than a general business license from the city or county clerk's office. On the other hand, an LLC that provides professional services--such as an accountant or physician--must get an occupational license from the state where the limited liability company operates. An LLC that operates from a specific location may be required to obtain a zoning permit from the city or municipality that it operates in. Contact the city or county clerk's office where the LLC operates to ensure legal compliance with local licensing and permit requirements.
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