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The basics of forming an LLC

On Behalf of | Sep 19, 2022 | Business formation

Creating a limited liability company (LLC) is an exciting prospect. It is not the right decision for every business owner, but it is the simplest option for many small business owners. LLCs allow business owners to separate their assets from business assets. If your company goes bankrupt or faces a lawsuit, you do not risk losing your property to pay expenses.

According to the United States Census, 421,503 businesses formed last August alone. LLCs are one of the most popular options, so see below for some tips before you start a limited liability company.

Assign a registered agent

LLCs require a registered agent. Your company will receive various legal and financial documents, and a registered agent is the designated receiver. Anyone older than 18 who works at your company can be a registered agent, but they must live in the state where you registered the LLC. They also must be available during regular business hours.

Find a unique name

Naming your business is a small but important aspect of starting an LLC. If you currently use a name for your sole proprietorship, you need to check if an LLC already uses that name. In most cases, state laws do not allow duplicate titles.

File the paperwork and pay the costs

Each state has its own paperwork for starting an LLC. You must file a Certificate of Formation in Delaware and pay $90. Pennsylvania calls the filing paperwork a Certificate of Organization, costing $125. Finally, Maryland requires you to file the Articles of Organization, which costs $100.

LLCs are relatively easy to create. However, you should still do a lot of research before moving from a sole proprietorship to a limited liability company.