How do I form an LLC?

How to form an LLC in 5 basic steps

1. Pick out a suitable name for your LLC.
2. File the “Articles of Organization” or “Certificate of Formation” or “Certificate of Organization” (different states use different terms) and pay the filing fee.
3. Create an Operating Agreement. In some states, creating an Operating Agreement is not mandatory when forming an LLC, but it is still advisable to do so. The Operating Agreement is not only useful for the members of the LLC; you can also expect the IRS to ask for your Operating Agreement fairly soon.
4. Publish a notice to tell the public about your newly formed LLC. In some states, this step is not obligatory.
5. Obtain the licenses and/or permits that your business needs in your particular state and in any other states where you will be doing business.

What are the Articles of Organization / Certificate of formation / Certificate of Organization?

Articles of Organization / Certificate of formation / Certificate of Organization are three different names used for the basic documentation you need to form an LLC. Different states use different names.

When you feel ready to file your Articles of Organization, you simply head for the state’s filing office and fill it out there. You can also bring it home if you prefer, or hire someone to help you fill it out. The LLC construction was created to suite the small business owner and the required paper work is not very tricky to fill out correctly. You will be given a form where you fill in the blanks and check the appropriate boxes.

The exact outline of the Articles of Organization varies from state to state, but most states will ask for at least the following information:

1. The name of the company you wish to form.
2. The name of the members (owners) of the LLC.
3. The company address.
4. The name and address of the registered agent.  

Choosing an appropriate name
As you can see, you must have picked a name for your company before you can form an LLC. In many states it is possible to reserve the name to prevent others from picking it while you are in the process of forming your LLC.

The name of your LLC should not only be commercially viable and well-liked by you, there are also quite a few rules that you have to follow. Each state has their own set of rule so it is best to contact the authority in charge in the state where you plan on forming your LLC. This way, you won’t have to spend time on developing a name that will be automatically rejected. The corporations division of the secretary of state’s office will normally be able to help you chose a suitable name and avoid names that are already taken.