How to Create an LLC: Starting a Business
One of the things I am frequently asked as a business coach is how to get “legal.” In particular, many want to create an LLC to protect their assets, and they also need to know what licenses they need for their business. This article will walk you through creating an LLC for your business, along with a few other things you need to keep in mind when starting a business.
If you aren't sure what business to start yet, be sure to bookmark this page then download our report “Just Mow Yards: 100+ Simple Yet Profitable Niche Business Ideas.”
DISCLAIMER: The information provided on this website does not, and is not intended to, constitute legal advice; instead, all information, content, and materials available on this site are for general informational purposes only.
What is an LLC?
In case you're not familiar with what an LLC is, a limited liability company (LLC) is a business structure in the United States whereby the owners are not personally liable for the company's debts or liabilities(1). Protecting your personal assets from lawsuits and business failures is one foundational step every business owner should take. An LLC is one of the simplest structures you can set up which offers you some protection.
Creating an LLC Using incfile and RocketLawyer
Both incfile and RocketLawyer offer wizards to create an LLC. I recommend using a combination of the two as there are certain things that are easier in each in my opinion. I'll walk you through this in this article, just be aware the entire process may take an hour or so, so I'd suggest bookmarking this page for reference.
There are some additional things you should do to finish protecting yourself, like create an operating agreement, register with your county and state, get any business licenses you need, and separate your books that we'll also cover here.
Use Incfile to Create Your LLC
1. Click “Launch My Business”
Go to the incfile website, then click “Launch My Business.”
2. Choose the type of business (LLC)
Once you click launch my business, select create an LLC. There are other business structures available, but for most businesses, an LLC is the perfect starting point. Choose your state as well to get state-specific guidance.
3. Select your plan
Once you choose your business type and state, you'll need to pick a plan. I highly recommend selecting the gold plan.
Choosing your program is like goldilocks; the platinum plan is overkill for most people. The silver one doesn't include an EIN, which you'll need for taxes or if you ever have employees or contractors. You also don't get alerts with the silver plan, which you need to stay compliant in the future.
You'll need to file an annual report, and depending on your industry, there may be additional business licenses you need. At a minimum, most US companies need to get an EIN at the federal level. You'll also usually need a business license from the state and one at the county level plus any industry-specific permits.
4. Follow the prompts to create your LLC
Follow the prompts to finish completing and filing your LLC.
I'd suggest going ahead and getting the tax review. The gold plan includes that, and it's handy to be able to talk things through with an accountant as business taxes can get complicated.
You'll also want to check the option to get a business banking account to get a business checking and charge card. You can also do that later with a bank of your choice, but make sure you get a business account. Keeping your personal and business finances separate is critical to maintaining the protection that an LLC offers you.
5. Review the recommendations list after you have created your LLC.
Once you've created your LLC, you'll see several additional task suggestions. Be sure to go through those as it'll go through any other licenses you'll need, plus they have a lot of helpful tips for new business owners.
Use RocketLawyer to Create Additional Forms After Creating Your LLC
I highly recommend creating a custom LLC operating agreement. Without a properly executed operating agreement, you're left with the default one from the state which may not give you the protection you want.
An operating agreement spells out your relationship to the business which helps protect you in the case of a lawsuit or business failure. I like incfile's step by step process a little better for creating a business, but I didn't like the operating agreement from them as I feel like it is overly confusing, so I use RocketLawyer for that. Click here to fill out the form.
You may want to consider a subscription to RocketLawyer as well, at least for the first few months. It is especially handy during the startup phase of a business to produce things like a business plan, employee handbook, employment contracts, and get legal questions answered. I encourage you to run any forms you create past their attorneys. You can even use it for essential personal documents like wills.
Use QuickBooks for Your Business Finances
One of the biggest mistakes new owners make is not separating their business and personal finances. I highly recommend getting a business checking and charge card (which you can get if you selected the gold plan through incfile).
I use Quickbooks to keep track of my business finances, and it's widely known so nearly any accountant should be able to help you out with it. It's relatively easy to use and has online help built in so most people can figure it out. They also have accountants available through the app as well. When you use the web version, you can simply select one in your area to work with.
I'd recommend getting either the Essentials or Plus plans or you'll quickly find yourself wanting some of those features. Essentials is fine for most new businesses. I'm a QuickBooks Ambassador, so if you use this link you'll save 50% on the first three months.
Save Even More by Subscribing!
Speaking of savings, be sure to sign up for our newsletter! We have thousands of members worldwide, which allows us to offer significant savings on business courses and other items to our customers.
I hope this guide for creating an LLC has been helpful. If it has, be sure to share so that someone else can benefit as well!