Starting a Limited Liability Company (LLC) Checklist
You and your buddies have been working on a killer business idea for years. Well before you graduated college and began your full-time job. The three of you are finally in a position to dedicate time, effort, and monetary resources to making your dream business become a reality.
But where to begin? Starting a business is a huge financial risk. You don't want to put your cars, home, and personal belongings at risk if you aren't able to pay your bills. Shielding your personal assets is one of the many benefits of starting a limited liability company (LLC).
You've floated the idea to your potential business partners, but need more specifics. While the best plan of action is to speak to a lawyer, below is a primer on starting an LLC.
Consider all the major brands you know that are actually LLCs: Kaiser Permanente, Koch Industries, Price Waterhouse, and even Chrysler operate under LLC agreements.
Remember, the strength of your LLC lies in the operating agreement. It dictates everything your limited liability status, to head off financial and management issues, and more. Not every state requires your to create an LLC, but having one is always advisable, particularly if you wish to operate your company by your own methods and rules and not those imposed on you by default through your state.
If you truly are thinking of starting an LLC, this checklist will provide you with a list of steps to take before you open for business. Keep in mind that your LLC's start-up requirements might vary from the list below, depending on the specific type of business you are in, and where your business is located.
- Decide on a business name for your Limited Liability Company (LLC). In most states, "LLC," "Limited Liability Co.," or a similar variation must be included in the LLC's business name. (Learn more: Pick a Winning Name for Your Business)
- Search availability of your LLC's chosen business name, and for similarity to existing names. (Learn more: Make Sure Your Proposed Business Name is Available)
- Register your LLC name (including as a "fictitious business name"). (Learn more: Registering Your Business Name)
- Create and sign an LLC Operating Agreement. (Learn more: Creating an LLC Operating Agreement)
- Write your LLC's Articles of Organization. (Learn more: Writing and Filing the Articles of Organization)
- File your LLC's Articles of Organization with the Secretary of State office in your state.
- Obtain business licenses and permits for your LLC from:
a. The federal government. (Learn more: Federal Start-Up Requirements)
b. Your local government.
- State and Local Small Business Licenses for Start-Ups;
- Federal Business Licenses;
- Employer Identification Number (EIN) FAQ
Get Peace of Mind When Starting Your LLC: Call an Attorney
Forming a limited liability company (LLC) can be a long-term benefit for your new business, but the process can be complicated. To ensure that your new business complies with your state's legal requirements at all steps in the LLC formation process, you may wish to consult an experienced small business attorney in your area. The cost of not properly complying with the law can be astronomical and can even sink your young business.