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How to Get an LLC: A Step-by-Step Guide to Business Formation

Forming an LLC is a strategic decision that provides legal and financial benefits for business owners. The process involves several key steps, each of which must be completed accurately to ensure compliance with state laws. Below is a detailed breakdown of the LLC formation process, along with practical advice to help you avoid common pitfalls and streamline your business setup.

Step 1: Choose a Business Name

The first step in forming an LLC is selecting a unique and compliant business name. Your LLC’s name must adhere to state-specific rules, which typically require it to be distinguishable from other registered businesses and include a designator such as “LLC” or “Limited Liability Company.” Most states provide an online business name database where you can check availability. It’s also wise to secure a matching domain name for your business website.

Step 2: Appoint a Registered Agent

Every LLC must designate a registered agent, a person or entity responsible for receiving legal documents on behalf of the business. The registered agent must have a physical address in the state where the LLC is formed and be available during standard business hours. Many businesses opt to hire a professional registered agent service for reliability and privacy.

Step 3: File Articles of Organization

The Articles of Organization (also called a Certificate of Formation in some states) is the official document required to establish your LLC. This form includes basic information about your business, such as its name, address, registered agent, and member details. Filing fees vary by state, typically ranging from $50 to $500. Most states allow online submission, and processing times can range from a few days to several weeks.

Step 4: Create an Operating Agreement

While not always legally required, an Operating Agreement is a critical internal document that outlines the ownership structure, management roles, and operational procedures of your LLC. This agreement helps prevent disputes among members and ensures smooth business operations. Even single-member LLCs can benefit from having an Operating Agreement to reinforce their limited liability status.

Step 5: Obtain an EIN and Necessary Licenses

An Employer Identification Number (EIN) is a federal tax ID issued by the IRS, which is necessary for hiring employees, opening business bank accounts, and filing taxes. Applying for an EIN is free and can be done online. Additionally, your LLC may need local business licenses or permits depending on your industry and location. Check with your city or county clerk’s office for specific requirements.

Comparison of LLC Formation Services

Service	Features	Pricing
LegalZoom	Name availability check, registered agent service, document filing	$79 + state fees
Incfile	Free registered agent for first year, document preparation	$0 + state fees
Northwest Registered Agent	Privacy protection, compliance alerts	$225 + state fees

For further reading, visit the IRS website or your state’s business filing office .

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