A limited liability company, or LLC, is a form of business organization popular among individuals looking to start a new business. Starting an LLC simply requires filing a document, generally called an “articles of organization," with your state’s business registration entity. While obtaining a business license is not a requirement for starting an LLC, you may need to register your LLC with your state’s tax agency and obtain occupational licenses before operating your LLC as a business.
While state laws vary, the only requirement for forming an LLC is that the person organizing, or starting, the LLC be of the age of majority, which is typically 18 years old. Almost all states have abolished residency requirements, which required a person to be a state resident in order to form an LLC in that state. All states require you to designate a registered agent, a person or business that will receive service of process if your LLC is sued.
Forming an LLC
An articles of organization document generally needs to include your LLC's name and designate a registered agent for service. Some states require you to indicate the purpose for which you are organizing your LLC. States may also require you to disclose how your LLC will be operated and the names of individuals who will be managing your LLC. The cost of registering an LLC can range between $50 and $350.
Read More: Can Forming an LLC Protect Your Personal Property?
After forming your LLC, most states require you to register your LLC with the state tax agency. Typically, you will need to do this if your LLC will be engaged in commerce that sells taxable goods or will be hiring employees. Depending on the state, you will need to pay taxes on income received by the LLC in the state or a flat annual fee for maintaining an LLC in the state.
While state and local requirements vary, states and counties may require you to obtain a business license in order to operate your LLC as a business in that area. Additionally, you may need to obtain other licenses from state, county and city governments for maintaining certain types of businesses, such as a liquor store or a firearms store. These licenses, while necessary in order to operate your business, are separate from the process of creating and registering an LLC, which is a legal entity.
Salvatore Jackson began writing professionally in 2010. He has experience with international travel, computers, sports and law. Jackson is a licensed attorney with experience in legal research. He received his Juris Doctor from Tulane University in 2010.