5 Easy Steps To Start A Limited Liability Company (LLC)

Posted On : Sep-03-2021
5 Easy Steps To Start A Limited Liability Company (LLC)

Let’s know about the Limited Liability Company (LLC) in brief before the steps to create it. LLC (Limited Liability Company) is a USA -based private limited company which is a business structure that combines the aspects of partnerships or sole proprietorship with the limited liability of a corporation. This is the hybrid entity that combines the characteristics of the corporation and partnership. LLC provides flexibility for the business owners based on their situations it is organized as the not–for–profit. 


The Law of LLC was first authorized by Wyoming in 1977. LLC rules and regulations are subjected to fewer than normal corporations. Some examples of LLC are Alphabet company of Google, PepsiCo Inc, Exxon Mobil Corp, and Johnson & Johnson. 


The Limited Liability Company taxation is different from the corporations. As corporations, the profits are first taxed at a corporate level and taxed a second time when those profits are distributed to shareholders. While in LLC the profits are passed to shareholders at first and taxed as the investor personal income.


Advantages of LLC:


The main advantages of LLC are the flexibility and Protection that provide them.




 LLC provides more flexibility than the corporation companies. As it chooses the different tax treatments such as sole proprietorship, S corporations, partnership, or C corporations. LLC companies opt for the flow-through entity as the income in the flow-through entity avoids double taxation.




LLC companies exist as their own legal entity then the corporations. This protects members and owners from being held personally liable for the operations and debts of the business.

The disadvantages are the fees and taxes and regulations of the LLC while comparing to corporations they are less.


Steps To Start A Limited Liability Company (LLC):


  1. Choosing a name for LLC
  2. Get a statutory agent
  3. File the Certificate of Formation
  4. File for Operating Agreement
  5. Apply for an EIN and Review Tax Requirements


Choosing a name for LLC:


While choosing a name for your own LLC it should be unique and it should be different from any other LLC in your state. It should compulsory to include the LLC or Limited Liability 

Company at end of the business name. It is most important to research for the desired name is available or not.

Get a statutory agent:


The statutory agent is nothing but a registered agent. The registered agent acts as the liaison between the LLC and the state registered it. This third-party agent receives things like tax forms, legal documents, government correspondences, and notices of the lawsuit on behalf of the business.


File the Certificate of Formation:


The official name for the paperwork filed to register your business depends on which state you are filing it in. Generally, the document is referred to as the Articles of Organization, but some states refer to it as a Certificate of Formation or Certificate of Organization. Regardless of what it’s called, the concept is the same: It is used to establish state recognition of the LLC and outline the details of its members.


File for Operating Agreement:

Getting an operating agreement is the smart move to our business and this is not required in every state. This legally binding document provides clear and concise definitions of all ownership terms and rules or management decisions It prevents miscommunications and resolves the conflicts between members. It should be kept safe and secure.


Apply for an EIN and Review Tax Requirements:


EIN (Employer Identification Number) should be registered with the federal government from the IRS after officially forming of LLC. 


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