Complete Guide: Easy Steps on How to Become A LLC In 2023

Setting up a limited liability company is one of the most important aspects of starting a business (LLC).

An LLC can provide liability protection for your business, among other advantages.

However, forming an LLC is much easier and less expensive than you might think.

You no longer have to spend thousands of dollars on business formation.

To form an LLC, you must submit documentation to the state where your business is located.

To set up an LLC, you must follow a few steps regardless of where you live, even though each state has its own laws and regulations.

What Is the Definition of a Limited Liability Company (LLC)?

A limited liability company (LLC) is a type of corporate structure commonly used in the United States that protects its owners from personal liability for the firm’s debts or liabilities.

Limited liability companies are legal structures that combine aspects of corporations, partnerships, and sole proprietorships.

While an LLC’s limited liability is similar to that of a corporation, a partnership, rather than an LLC, can offer members flow-through taxes.

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Steps to Start an LLC

A limited liability company is one way to legally structure a business (LLC for short). It combines the limited liability of a corporation with the flexibility and lack of formality of a partnership or sole proprietorship.

Any business owner who wants to limit their personal liability for company debts and legal actions should consider forming an LLC.

The steps involved are as follows:

Step 1: Select a State

You can form an LLC in any of the 50 states, regardless of where you live or intend to do business.

Delaware, Nevada, and Wyoming have state laws that are especially beneficial to businesses.

Delaware does not tax out-of-state income. Nevada and Wyoming have no business income tax.

When forming an LLC, a new business owner will frequently choose one of these states.

Unfortunately, evading the taxman is more difficult.

If you form your LLC in one of these states, you will pay more.

If corporate entities could avoid paying corporate income taxes by locating in Nevada or Wyoming, everyone would do so.

We strongly advise forming your LLC in the state in which you live.

Step 2: Give your LLC a name.

Marketing may be on your mind as you consider company names.

Aside from meeting state legal requirements, it would be beneficial if you chose your company name with branding in mind.

State regulations frequently prohibit choosing a company name that is already in use by another company in your state.

Most states also prohibit the use of phrases that imply you work in a specific industry, such as insurance or banking.

And you’ll almost certainly need to end your company name with “LLC” or “limited liability company.”

By going to the website of the state organization in charge of business filings, you can research the LLC naming regulations in your state and see if the name you want is available. In most states, this is the Secretary of State.

Get a Domain Name That Matches

Even if you have no plans to launch a business website, we recommend that you get a matching domain name as soon as you decide on a name.

The public can see the name of an LLC once it is formed.

Competitors may buy variations of your ideal domain name in order to prevent you from using it.

So-called “domain squatters” search public databases and register domains that correspond with newly registered LLCs in order to quickly list them for sale with a significant markup.

Assume you try to register your domain name months after forming your LLC. In that case, you may discover that the name has already been registered and is now being offered for sale at a 10x premium, or it may link to a competitor website.

A custom domain name from or a comparable registrar can cost between $20 and $50 per year, with frequent promotions and specials offering significant discounts.

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Step 3: Choose a name (optional)

Even if you won’t be filing your LLC forms right away, you should reserve the name if your preferred LLC is available.

You can reserve a name by filling out a form and paying a fee, which is legal in almost every state.

The duration of the reserve period, filing fees, and renewal procedures differ from state to state.

Step 4: Select a Registered Agent.

Every state requires LLCs to have a registered agent.

A registered agent accepts official or legal papers on behalf of the LLC (such as subpoenas).

After receiving these documents, the registered agent will deliver them to the managing member of the LLC.

A registered agent can be anyone over the age of 18; you can designate yourself or a staff member.

During regular business hours, the agent must be available in your state.

A company that provides registered agent services could also be chosen.

Naturally, there will be a cost involved; registered agent fees may exceed $100 per year.

Step 5: Get a Copy of Your State’s LLC Article of Organization Form

To establish your LLC as a legal entity, you must submit a document to the state agency in charge of business files in your state.

Most states refer to this document as the articles of organization, while others refer to it by different names, such as certificates of establishment.

Every state has its own set of forms. To obtain the form for your state, return to the website you used for business name research.

Step 6: Create the Articles of Organization for the LLC.

Each state will outline its own requirements and steps for people attempting to form an LLC.

You will need to provide the following essential information:

  • The name of your company
  • Your main place of business’s location
  • The mission of the company How you intend to run your LLC
  • How to contact the registered agent (including, in some states, the agent’s signature)
  • The LLC’s life span

After that, one or more business owners or organizers must sign the form.

Some states, such as Nebraska and New York, require you to place a newspaper ad announcing your intention to form an LLC.

You must complete this stage before filing the articles of incorporation.

You can research the LLC naming regulations in your state by visiting the state organization in charge of business filings’ website and determining whether the name you want is available.

In the majority of states, this is the Secretary of State.

Step 7: Submit the Articles of Incorporation.

Examine your articles of incorporation carefully before submitting them to your state.

You must also pay a filing fee, which varies depending on the state in which you incorporate your business.

Once the state has approved your formation documents, you will receive a certificate proving that your LLC is legitimately registered.

Use it for other tasks such as opening a business bank account and obtaining a tax ID number.

Step 8: Create an Operating Agreement 

The operating agreement specifies each LLC member’s financial, legal, and managerial rights.

It can specify who contributes capital to the company, how members leave the company, and how profits are distributed.

Essentially, it must contain all relevant information about your LLC’s operations.

Even if many states do not require an operating agreement, you must still create one.

One should be created for LLCs with more than one member or partner to ensure that everyone is aware of their responsibilities.

Even one-person businesses will benefit from writing down the details.

Making your own operating agreement is an option, especially for single-member LLCs.

There are also numerous free templates available online to assist you in getting started.

In more complicated situations, such as LLCs with multiple owners, the cost of hiring an experienced attorney may be well worth it.

Step 9: Obtain an EIN

An Employer Identification Number (abbreviated as “EIN” or, incorrectly, “EIN Number”) is the nine-digit tax identification number for your LLC. Consider it your LLC’s social security number.

These numbers are used by the IRS to track down business entities for tax purposes.

Every LLC that makes money or seeks to hire employees is required by the government to have an EIN.

Most financial institutions require an EIN to open a business bank account.

You must apply for an EIN with the IRS. Form SS-4 applications can be submitted online or by mail.

You will receive your EIN immediately after submitting the online form.

Step 10: Keep Your LLC Active

Creating your LLC is only the first step.

After your company is established, you must ensure that it maintains good standing with your state.

Again, the most recent information on how to do this can be found on the website for company filing in your state.

An annual report with updated information about your LLC, as well as payment of a filing fee, may be required.

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Should Members or Managers Manage My LLC?

Most small LLCs are run solely by their members, though LLCs can appoint one or more people (from outside the LLC) to run it, similar to how a corporation is run by a board of directors.

Managers vote on borrowing money, purchasing real estate, or changing strategic goals.

Can My LLC Do Business in Other States?

If you want to do business in a particular state, you must register your LLC there and designate a registered agent to receive service of process.

If your LLC operates in more than one state, you may need to register to do business in other states.

You will be required to complete and submit paperwork for this purpose, which is similar to the paperwork you completed when you formed your LLC.

You will also need a registered agent in each state where you are permitted to do business.


A limited liability company is an essential legal framework for establishing a business (LLC).

When a company has limited liability, its assets and liabilities are kept separate from the assets and liabilities of its owners.

As a result, if a business declares bankruptcy, creditors can only pursue the company’s assets, not the owners’ personal assets.

LLCs also have many advantages, such as simplified taxation and a generally simple establishment procedure.

This helps to explain why limited liability companies (LLCs) are the most common business structure in the United States.

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