LLC Formation FAQ

Choosing an LLC name involves several key requirements:

• Uniqueness: Your name must be distinguishable from other registered businesses in your state
• LLC Designation: Include "Limited Liability Company," "LLC," or "L.L.C." in the name
• Availability Check: Search your state's business registry to verify availability
• Domain Consideration: Check if a matching domain name is available for your website

Pro tip: Have 2-3 backup names ready in case your first choice is taken!

A registered agent is a person or business authorized to receive legal documents on behalf of your LLC. Yes, you need one! It's legally required in all states.

Your registered agent must:

• Have a physical address in your state of formation (no P.O. boxes)
• Be available during normal business hours
• Accept legal documents and official correspondence

You can be your own registered agent, but many business owners prefer using a professional service for privacy and convenience.

LLC formation costs vary by state and service option:

• State Filing Fees: $50-$500 (varies by state)
• Registered Agent: $0 (DIY) or $100-$300/year (service)
• EIN: Free from IRS
• Operating Agreement: $0 (DIY) or $50-$200 (professional)
• Business Licenses: Varies by location and industry

Total DIY cost: $50-$800 | Using a service: $150-$1,500

LLC formation timeline depends on your state and filing method:

• Online Filing: 1-3 business days in most states
• Mail Filing: 2-4 weeks
• Expedited Service: Same day to 24 hours (additional fees apply)

After state approval, you'll need additional time to:

• Obtain an EIN: 15 minutes online
• Open a bank account: 1 hour
• Get licenses/permits: Varies

While not legally required in most states, an operating agreement is highly recommended for all LLCs, even single-member ones.

Benefits include:

• Clarifies ownership percentages and member responsibilities
• Prevents future disputes between members
• Strengthens your LLC's limited liability protection
• Required by banks and investors

Think of it as your business's rulebook - better to have it and not need it!

An Employer Identification Number (EIN) is required if you:

• Have employees
• Have multiple members
• Want to open a business bank account
• File certain tax returns

Even single-member LLCs should get an EIN to:

• Separate business and personal finances
• Build business credit
• Work with vendors who require it

Good news: EINs are free from the IRS and take about 15 minutes to obtain online!

An LLC creates a legal separation between you and your business, protecting personal assets from business liabilities.

Protected assets include:

• Your home and personal property
• Personal bank accounts
• Personal investments
• Your car (unless used for business)

Important: To maintain protection, you must:

• Keep business and personal finances separate
• Maintain proper LLC records
• Follow corporate formalities
• Not personally guarantee business debts

LLCs have several ongoing obligations to maintain good standing:

• Annual/Biennial Reports: Required in most states ($50-$800/year)
• Registered Agent: Must maintain continuously
• Business Licenses: Renew as required
• Tax Filings: Federal, state, and local taxes
• Record Keeping: Maintain business records and minutes

Missing deadlines can result in penalties or administrative dissolution!

Consider forming an LLC if you:

• Have personal assets to protect
• Want to appear more professional
• Plan to have business partners
• Need to raise investment
• Want tax flexibility

Stay a sole proprietorship if you:

• Have minimal liability risk
• Want maximum simplicity
• Are just testing a business idea
• Have few personal assets at risk

Yes! You can operate in multiple states with one LLC through a process called "foreign qualification."

How it works:

• Form your LLC in one state (your "home" state)
• Register as a "foreign LLC" in other states where you do business
• Pay registration fees and taxes in each state
• Maintain a registered agent in each state

You typically need to register if you have a physical presence, employees, or substantial business activity in a state.