Perhaps you have been considering starting a business but have been putting it off. Well, what is stopping you now? Time, money, friends, family, or other commitments. Whatever the excuse, stop making it now and take action. Running a business will give you the freedom and the opportunity to pursue an interest that you have put on the backburner.
There are lots of different business types and entities you can create but perhaps you are unsure which one is right for you. Not all types of business entities will be right for you. For example, if you are running the business on your own or with someone else, this will affect what type of business you can incorporate. So, with this in mind is an LLC the right way to go?
If you have decided an LLC is a right route for your business to go down then you need to know that an LLC is a structure that ensures the business owners are not responsible (in a personal capacity) for any of the company’s debts or liabilities. Why not utilize a ZenBusiness guide to forming an LLC it will help you make an informed decision that suits you and your business, it’s a guide that saves you time as it looks at and compares the different business structures on offer. Utilizing guidance from others at this stage of your business setup will stop you from incurring any unnecessary costly and timely mistakes. So moving forward with your business set up, what steps do you need to follow to form your Limited Liability Company.
Steps to Setting Up an LLC
These steps may vary according to your state but in general setting up an LLC involves.
- Visiting your local Secretary of State or accessing online your State’s LLC Articles of Organization Form.
- Choosing a name for your business. This is something that requires research and a lot of thought as it is important to remember that whatever name you choose for your business it will end with LLC.
- Filling out the LLC Articles of Organization Form – These can quite often be filled out online, so it is always worth checking.
- Setting up an LLC bank account. It is necessary to keep your personal and business finances separate, so opening a separate business account from that start will ensure you can keep everything easy to manage.
- Creating an LLC Operating Agreement ( Ideal and necessary for if your business has more than 2 members) An operating agreement will clearly set out both functional and financial decisions within your new business, including regulations, rules, and any provisions.
It is worth remembering that it is usually best to set up your LLC in the state you wish to trade from. Again, check with your local state what steps they wish you to comply with.
Things To Consider When Setting Up an LLC
- Are there any similarly named LLC’s around, if there are, this may cause confusion with your customers and target audience, so potentially consider changing your business name before you get started. A different name will help you stand out and get seen.
- Is it just going to be you involved within the business or are there other people including family and friends who will be involved in the day to day running?
- Make use of registered agents. An agent can save you hassle and time, they will have done the process plenty of times before. All registered agents will ensure that your LLC gets registered and incorporated as quickly and seamlessly as possible.
- Keeping adequate paperwork and accurate records are essential for the running of any business, especially an LLC, so getting a system in place before you start trading is usually the best route to follow.
- What type of tax implications are there for you and your LLC, as an LLC you will be paying taxes through your personal tax forms (through the profit and loss section) as opposed to the LLC paying taxes.
- Consider hiring a consultant. Getting a consultant on board can help ensure your new LLC business is following the correct regulations and laws in relation to everything from hiring to discrimination. Making use of consultants is more cost-effective than trying to do everything yourself.
- Check what fees are involved. Like most things state fees can and do vary, so check filing fees before you submit anything. What are the one-off costs and what are the annual filing costs?
- Consider the long term options for your business – Will you be hiring any employees? If so then you will need to get an Employer Identification Number.
- Finally, do you have the licenses you require to begin trading? Do you have the necessary business licenses in place to trade? Once you have the correct licenses to start trading you can get your business firmly off the ground.
Setting up a business does not need to be daunting, make use of people’s experience, and don’t be afraid to ask questions. Once your business is formally set up you can then get to work on turning your business dream into a profit-making reality.
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