How to Create and Manage an LLC

Most small business owners prefer creating a limited liability company (LLC) due to the simplicity in management, liability protection, and tax advantages associated with the business. One of the biggest attractions to an LLC is that the beginning process is simple.

Here are the steps on how to get started:

Step 1: Choose the state to register your LLC

Starting your LLC means registering it in the state in which it resides. Should you decide to open business in another state, you will need to re-register your company when you expand.

Step 2: Determine the name of your LLC

You need an LLC under which you shall register your business on the Secretary of State's records.

Step 3: File articles of organization

You need to file articles of organization with the Secretary of State either online or filling a form from the Secretary of State's official website.

Step 4: Select your registered agent

You need a registered agent for accepting legal documents on behalf of the LLC for a multitude of legal reasons.

Step 5: Clarify the management and membership

The LLC can be managed directly by members or third parties can be appointed to manage it. This could be, for example, the board of directors.

Step 6: Develop an operating agreement

While not mandatory in some states, an operating agreement clearly states how the LLC will be run.

Step 7: Meet the tax and regulatory requirements

Ensure you meet all the taxation obligations of the business to avoid legal issues.

Step 8: File annual reports

Some states may require you to file an annual report alongside the filing fee.