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How to start a LLC in the USA (Limited Liability Company)

Thinking to start your own business, LLC in the USA? Want to leave that puppet job that makes your day and night miserable and hectic? If you are thinking to start your own business then you must have an idea of what type of business you want to go with, not only in product aspect but the structure of business and ways to protect the business in a low phase. So it is very important to choose the right business for you. Here is the complete guide.

There are various types of business you can start in the US such as sole proprietorship, general partnership, LLC, and S and C corporation. Among all, LLC is most favored but why is it so? Let us understand what is LLC. The main thing to think upon when to start a business is the tax. So, it is important that you plan the business and choose the legal form under which you will start your business.

How to start a LLC in the USA (Limited Liability Company)
LLC in the USA

What is LLC?

Limited Liability Company is famous for the liability protection business type that protects the owner in case business goes down. Many small business owners go for the LLC business type for the liability protection it provides. LLC exists separately from its owners and thus owners are not personally responsible for business debts. These are generally more easy to set up and provide added flexibility than corporations. LLC is a combination of a corporation and a partnership where like a corporation it shields the owners from being bankrupt by separating individual assets from the company ones and like a partnership, the profit and loss are shared among the partners.

Some important points to understand before going for LLC

Limited liability Company must have at least one member all the time. The owner/member does not to be a citizen of the US. The member can be in partnership with other corporations too.

The manager of the company has been appointed by members f the company to check out the operations of LLC. is the member. The manager can be a person or a corporation. Moreover, a manager need not be a resident of the US.

A very important agreement made by the owners of the company to govern the laws for the company’s progress. This agreement is known as the Operating Agreement. The LLC is based on partnership law. The agreement can be of a single page or a bundle of 100 pages.

Whenever the LLC comes to an end and is going to be closed, a Certificate of Cancellation is filed with the State Secretary of State.

How to start LLC in the USA?

Follow the below-mentioned steps to open your own LLC in the USA.

Step 1: Choose a Name for your LLC

There are proper naming criteria when you going to choose a name for your LLC in the USA. The first point is, two companies must not have the same name even if they are located at different places. The second point is, the name of LLC shouldn’t contain some reserved words like BANK, etc. Remember, to check if the name you have chosen is available before filing for the paperwork. A unique, different and clear name is always easy to remember.

Step 2: Reserve the Name

Though this step is optional but serves better for your company in the future. After choosing the name, you can go for paperwork and during paperwork, you can ask for Reserving the name option. Remember, this incurs a reservation fee.

Step 3: Find a Registered agent

A registered agent is a person who will do all the document formalities on your behalf and help you complete the paperwork. Most states allow anyone who is a state resident of the country and completed the age of 18 can work as a registered agent. There are some organizations too that provide registered agent services for a fee.

Step 4: Prepare LLC operating agreement

The LLC operating agreement is a complete guide for you and shows you how the company will operate. It documents things like profit and loss sharing, how meetings will be scheduled, how the business will be governed, the rights of the members and how the company will be dissolved in the future. This agreement has nothing to do with the state laws but its a documentation to avoid disruptions in the future between the members of the LLC.

Step 5: Organization paperwork with the state

Here you have to give complete information about your LLC such as

  • The name and address of the LLC in the USA.
  • The time duration of its existence, if not perpetual.
  • The name and address of the registered agent.
  • The purpose behind the formation of LLC.

Remember this paperwork is signed by, the person who is forming the LLC and in some places registered agent signature is required too.

Step 6: Obtain a Certificate from the State

After completing the paperwork, obtain the certificate for the same from the state office. After getting the certificate, take care of matters like obtaining a tax ID number and business licenses and setting up a business bank account.

Step 7: Register to Do Business in the Other States

This step is valid for those who have their business in more than one state. If your LLC is scattered over different states then you register in other states as well.

Final words

Well, friends, these are some easy steps to follow to enter into the business world. Start an LLC in the USA and Be your own Boss!

I hope you would like the article and find it beneficial for you. Please share your feedback.

Thank you!

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priyanka mittal

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