How to Form an LLC Quickly and Cheaply
Most lawyers won’t tell you this, but you can form an LLC by yourself. It’s fast and affordable. You’ll need a little patience and attention to detail, but that’s it. And for a very limited time, JUSTLAW will even do the work for you. Free of charge! That’s right. See the button below for more details. (Estimated 3 min read)
2. Clear the Name
3. Get a Registered Agent
4. File the Articles of Organization
Want to form a limited liability company (LLC) yourself, quickly and cheaply? To do so, you need to select a business name, appoint a registered agent (which in some cases can be you), file the Articles of Organization, obtain an Employer Identification Number, and open a business bank account. The time and cost associated with forming a new LLC varies by state.
The LLC entity type is probably the most popular business type in 2021. This popularity stems from its flexible nature, limited liability protection and ease of administration, especially in contrast with traditional corporations. Many entrepreneurs would like to set up an LLC, but have avoided it due to time and costs. A traditional attorney might charge upwards of $2,500 to form an LLC and complete and prepare the associated paperwork. This essential primer will help you understand how you can form an LLC by yourself.
Searching your state’s database of corporate names before you file the Articles of Organization might be a good idea. If your name is relatively common, someone else may have already taken it. That would lead to your filing being rejected. Many secretaries of state, such as Delaware, have free, online databases where you can research the availability of any name you have in mind. In some states, you can even reserve a name online by paying a small fee. Naming requirements may vary slightly from state to state, but generally you must assure:
- Your LLC name must differ from the names of other businesses that are already registered in the state; and
- Your LLC name must contain a limited liability signifier, such as “LLC”, or “Limited Liability Company”. Eg, ACME LLC.
The name and address of a registered agent are normally required on the formation papers for your LLC. An agent is a person or entity tasked with receiving legal papers on behalf of your LLC in the event that your company is sued. The agent must have a physical address in the state and must be available during work hours on all workdays for this purpose.
Articles or Organization are usually submitted to the state’s Secretary of State along with a filing fee. When the Secretary of State accepts your Articles of Organization, your LLC has officially been formed. Many states will accept articles and have your company “live” in 24-48 hours. This document provides the fundamental details on your business, such as:
- The name and address of the company.
- The business purpose of the company (e.g., “to engage in e-commerce cat food sales”).
- A statement on whether the company will be managed by a manager or the members.
- The name and address of the registered agent of the LLC.
Although successfully filing the Articles of Organization indicates that the state recognizes the LLC, there are additional steps to get yourself truly in business.
After the Articles have been filed and accepted, other considerations are:
- Publishing the Articles of Organization. In some states, such as New York, new LLCs must publish the fact of their formation in a local newspaper and to file an affidavit of publication with the state. Publication costs can exceed $1,000, so you should consider this fact when selecting a state.
- Drafting an operating agreement. You will not file your operating agreement with the state, but you need one as an internal contract between the members of the company. If you have partners, or other members, you should likely find a good business lawyer to help you with this work.
- Procure an Employer Identification Number (EIN). Banks and governments both require an employer identification number. This number acts, in essence, as a social security number for your new company. EINs are available free at the IRS website.
- Getting a business bank account. Your LLC will need a business bank account or the members’ limited liability protection can be called into question by the authorities.
- Determine if your business requires a license. Some states or cities may require you to obtain licenses to do business. It varies by jurisdiction and a complete survey is beyond the scope of this primer, but Google will at least get you started.
Hopefully, this primer gives budding entrepreneurs all they need to set up an LLC alone. If not, and you’d still like to set up your own LLC, for a limited time (through Labor Day 2021), JUSTLAW will do the paperwork for free. JUSTLAW maintains a network of over 300 attorneys in all 50 states. Our lawyers graduated from places like Harvard, Yale, Berkeley and UVA. Click the button below to get started.