When registering your company online, you first want to determine what type of business entity it will be. There are many different types of legal entities, with the most common one being a Limited Liability Company (LLC). In this blog post, we'll take a look at how to get an LLC online and what you need in order for it to be successful.
LLCs are a popular structure for small businesses because they combine the benefits of a partnership or sole proprietorship with those of a corporation.
An LLC is also easy to set up online by yourself because you can choose its legal structure and form the company all in one single step. Every step of your LLC formation can be done online. It is only later that you might be required to file forms with the state in which your company is located and provide signatures and other legal documents physically.
Get a Business Name and Address
You'll need to choose a suitable and unique name for your LLC. Make sure it's available on both local and federal levels. You can check that either online or by calling the Secretary of State where you live or intend to set up your new business.
You can check for business name availability online. You will need the business name and address of the LLC's organizer (the person starting up the business) to apply.
Keep in mind that if there is already a business entity with your desired LLC name registered at both levels, it'll be unavailable to register as an LLC.
This includes all variations of spelling and numbers added onto the business' original choice too.
For example: 'Smith Bakery Inc.' would not be available if another bakery under this exact same name exists along with Smith Bakeries Ltd., etc. - no matter how different they may seem at first glance.
The Secretary of State website for your state will likely have a database and business name search tool. Of course, you can always use search engines and perform a name search there as well.
Most states have name reservation applications, allowing you to reserve your LLC name for 30-120 days at a small fee. If you wish to do so, it's advisable that you check with the Secretary of State website before filing for an LLC in order to save time and money if there are other businesses using the same business name at both levels.
Always make sure to check the naming requirements for the state where you want to form an LLC. If there are no issues with making use of the chosen business names, you can move on to the next step.
Read More: Do You Need a Physical Address for an LLC
Choose a Registered Agent
Regardless of the state of its formation, every limited liability company needs to appoint a registered agent or registered agent service that has a physical presence in that particular state. The reason why this is required has to do with the laws governing registered agents.
For example, if you are running your business out of Pennsylvania and want to form an LLC in California, there will be no problem filling your company documents online under the Secretary of State's website for that particular state.
However, when it comes time to act on behalf of this newly formed limited liability company, say by serving legal papers against it or calling upon its services for whatever reason, the law requires that such service must be performed through a representative who has a physical presence within that same state where the business operates.
If not so served, any of these court proceedings initiated against your entity would require dismissal based on lack of jurisdiction over subject matter per se because they fail to serve valid documentation.
You can search online for the most reputable registered agent, choose your billing plan, and provide all necessary information about your LLC.
The cost of registered agent services varies by state and provider.
The registered agent service will provide you with a document called the "power of attorney" that grants them authority to accept any legal documents on your LLC's behalf, as well as an address where these papers can be delivered.
You will need to provide the name of your registered agent on the formation documents later on.
Draft an LLC Operating Agreement
An LLC operating agreement is usually not required by the state, but it is a good idea to have one in place.
This agreement can be written as part of your operating agreement for LLCs, or you can write it on its own and attach it to an existing document.
You can find operating agreements drafts online, for free or for a price.
A good agreement should include the following:
- Names and addresses of LLC members, managers (if you have them), and other beneficial owners;
- Members' capital interests in the company;
- The role each member will play in operating or managing the business;
- How profits are to be distributed based on that percentage interest, and how losses shall be handled for particular members if they arise. As well as provisions regarding the dissolution of business when a business owner withdraws from it.
A quality operating agreement is one of the most important documents for your LLC formation because it will outline how the LLC will operate.
The purpose of an operating agreement is to set forth what happens in a company's life cycle, whether it be through mergers, buyouts, or dissolution.
It should not be confused with articles of organization which is filed with state agency and give details about the business itself such as name, location, and registered agent.
File your LLC's Articles of Organization
Articles of Organization (also called a certificate of organization or formation) represent a document that is filed with the state to fulfill initial requirements for an LLC. Articles of Organization are typically filed by a company's members, managers, or organizers.
After choosing your desired form online and completing it, you must file articles at the Secretary of State office located in the state where you want to establish your business entity. Remember that some states do not allow electronic filing, so check before using any service which says this feature has been included.
If necessary, make sure to also take care of other recommended filings such as annual reports or biennial fees together with articles after they've been approved by the agency responsible for receiving them. This will help avoid additional penalties, including late fees and imposed on companies who fail to meet these requirements.
Obtain An EIN
If you're forming an LLC but plan to hire employees in the future, you will need an employer identification number (EIN). This number resembles a social security number for an employer. You can get an EIN by filling out IRS Form through the IRS website.
When you fill out this form, be sure that all of your personal information is correct, including name, address as well as business information such as entity type and location where the company will operate from.
There is no fee for this service.
Get a Business Bank Account
In order to have maximum liability protection, personal assets should not be commingled with business assets.
This means personal, and business accounts should be kept separate, so personal funds do not become tied to the business debts in case of a lawsuit against your company.
Every large financial institution has an online banking system that can provide access for both you and authorized employees at any time during regular business hours or after-hours via mobile apps on their phones.
This suggests either getting someone else who knows what they are doing to open it up for you or going into a local branch office where customer service representatives will help you get through this process quickly.
Apply for Business Licenses
If you want to start an LLC that will provide professional services, business licenses are required. A business license is also needed if you plan to do business in a different state than the one where your company was formed, and for most states, this means applying online.
Obtaining business licenses can be tedious, but many states make it easy by giving applicants ways to apply online, which is far more efficient than mailing or faxing applications.
Apart from letting you do business legally in the state, a business license is a guarantee that you're legally authorized to provide your service there.
Businesses without licenses may be fined or shut down, so it's important that the license is not only obtained but kept current for as long as you operate in a state.
Since business licenses are required by law and regulated at the local level, the requirements differ from one location to another. There are different licensing requirements at the federal, state, and local levels.
Filing LLC Taxes Online
The pass-through taxation structure is the reason why an LLC can file taxes online by yourself (through the IRS) or use third-party software or a tax professional.
Another good thing about filing your business's taxes online is that you get access to great features that are available exclusively for self-employed people, like expense tracking and mileage logging. You also get support from expert CPAs when you need it at no extra cost.
An LLC owner is treated as a sole proprietor by default, which means that you are required to file your personal taxes whenever you do the business.
This is why pass-through taxation works well for LLC owners because it simplifies things on their end of filing taxes online or using third-party software.
In case you choose to be treated as a sole proprietorship (which is a default status(, you need to file Schedule C, which covers your federal income taxes.
If you choose to be taxed as a corporation (C or S corporation), you need to file a form 1120 with the IRS or form 1065 if you're a partnership.
How Do I File an Annual Report for an LLC Online?
You can file your annual report online by logging into your account and clicking on the Annual Report tab on your Secretary of State website. You will be required to provide either a street address or a registered agent name in order to complete the filing process online for free. The filing fees for annual reports differ from state to state.
Can I File LLC Myself?
You can file LLC yourself, provided that you have all the required information. However, it is advisable to file LLC through an attorney who will help you with your legal matters and keep track of deadlines as well.
Can I Form an LLC without a Lawyer?
You can form an LLC without a lawyer, but it's not recommended. There are many pitfalls and traps you can fall into if you don't do your due diligence when forming an LLC. The business advice you can get from an attorney is valuable and can save you a lot of trouble.
How Easy Is It to Get an LLC?
Forming an LLC for your small business is easy and doesn't take too much time. The waiting time before you can officially start an LLC will depend on the processing period of your state. For example, in some states, the application usually takes about two weeks to process, and in others, it might take up to six weeks for all paperwork to be processed.
Can I File My LLC Taxes Myself?
You can, but you have to keep in mind that your business structure will determine what kind of taxes you need to file, depending on whether you elected to be taxed as a sole proprietorship, corporation, or partnership.
Can I Get LLC Insurance Online?
Yes, it is possible to get a limited liability policy online. But keep in mind that not all agents will take the time to walk you through everything, so it's best if you have a thorough knowledge of business insurance policies when shopping for your LLC insureds.
How to Get My LLC Online: Conclusion
If you're looking for a hassle-free way to protect your company, online LLC formation is the best option. In just one day, you could have a legal entity that will allow you to protect your company's assets from lawsuits or other unforeseen circumstances.
If this is your first time filing for an LLC online, then look out for ZenBusiness which can help set up your business.
An expert will be able to answer any questions that arise during the process and provide tips about how to maintain good company practices in the future, so there are no issues later down the line.