How to Start a LLC in The United States

A Limited Liability Company or LLC provides protection from personal liability for business debts, like a corporation. However, unlike a corporation that pays its own taxes, LLC is a pass-through entity. This means the profits and losses of the business is passed through its owners who report them on their own personal tax returns, like sole proprietorship or partnership. While setting up an LLC is harder than processing partnership or sole proprietorship, operating an LLC is easier than managing a corporation. Each state in the US has certain rules and principles when it comes to LLC creation. For business owners interested in learning how to start a LLC, they will need to comply with their respective state’s requirements. Each state designates an agency (mostly Secretary of State) that will show how to start a LLC. Business owners are expected to provide the necessary paperwork in order to start a LLC in their area. Once the documents are submitted, the SOS will form the business. The business formation time varies from state to state. Refer to the SOS website for the current processing time and documents required. State like Delaware and Nevada are very popular and hence the business formation takes more than usual time. When you want to start a LLC, you need to decide which state you want to register your LLC. You can either register your LLC to the state where you intend to do business or on other US states. If you want to build offices in other states, you will have to register for a foreign limited liability company for each state in which you have business operations. Otherwise you can opt for domestic LLC. Search for the state agency that oversees LLC registration in your state. For example, in Missouri, business owners file the LLC documents in the Secretary of the State office. In Michigan, business owners send the documents over to the Department of Energy, Labor and Economic Growth. For more information, you can check with your local the local chamber of commerce to know how to start a LLC and where to send the documents. Some states prefer filling LLC forms online like in Missouri. However, most states prefer standard paper form. For form filling, get Articles of Organization or Certificate of Formation. You can access such documents from local LLC registration office or print online forms from your computer. Next, submit the completed form and pay the necessary fees to the state filing the agency. Know that the filing fee will vary from state to state. The amount will go anywhere from $50 to $300 to file for an LLC. If you do not like the DIY approach, you can use various online business formation services like Nolo, Incfile etc. They usually charge a nominal fee on top of the state fees. Finally, once you are able to file all documents, your LLC is official and ready for business. Of course, you will have to create an operation agreement wherein all guidelines, principles, restrictions and operation information are detailed in a legally binding document. It can be confusing to learn how to start a LLC on your own. For this reason, hiring a service provider that is skilled in processing this type of business structure is in your best interest.