Many small business owners choose to set up a Limited Liability Company or an LLC for the liability protection it provides. An LLC is a popular and flexible business option for small businesses. Setting up and maintaining an LLC is easy and more flexible than corporations. Owners of an LLC are known as members, and the members are not personally responsible for business debts as an LLC exists separately from it owners.
Setting up an LLC is not a complicated procedure but there are a number of steps to follow in order to properly form LLC online. The application process itself is fairly easy. There is also the traditional options of sending the application form and filing fee through postal mail or in person.
Steps to apply for LLC:
- Choose a business name according to the state’s requirement. Make sure that the name has not been used by another existing LLC.
- File your LLC’s articles of organization or a certificate of formation by providing the name and address of your LLC, and the names of its members.
- Designate one of the LLC members to act as the registered agent.
- Draft an operating agreement to provide structure for important internal business decisions, such as percentage of ownership among members, voting rights, and responsibilities, members’ powers and duties, and provisions governing the transfer of members’ interests.
- Obtain business permits and licenses depending on both the state requirements.
- Open a separate bank account for your LLC to separate your LLC’s funds from the personal funds of its members.
A federal tax id application or an EIN for an LLC can be done fairly easily online. These days, businesses can simply follow the step-by-step instructions to apply for EIN online, instead of the traditional way via fax or by postal mail. An EIN is needed to start a new business, to hire employees including household employees. An LLC may require an EIN to open a bank account for banking purposes.
