5 Easy Steps to Form an LLC in 2022

Starting an LLC can be beneficial to your business whether you want to start a company, a website, a youtube channel, a clothing brand, or any other type of business. An LLC can help you by limiting your personal liabilities, helping raise capital from investors, and carrying tax advantages.

What is an LLC?

LLC stands for Limited Liability Company. It is a business structure that protects its owners from personal responsibility for their debts or liabilities. It also came with many tax advantages and the ability to raise investment from investors.

Why Should You Start an LLC?

An LLC can protect you and your business from liabilities and lawsuits that are trying to take your personal assets. If your business was sued or bankrupt the LLC will protect your personal assets and the assets of your investors and your partners from being seized.

LLC also offers many tax advantages; it helps you avoid double taxes and access tax deductions for legitimate business expenses, including the cost of forming the LLC.

What You Should Avoid While Starting an LLC?

I know that you are excited and willing to work very hard to start and succeed in your businesses and protect it and yourself with an LLC. I got it but there are a few things you should know before you register an LLC.

First, starting an LLC and doing nothing with it. Don’t start an LLC if you are not going to use it for your business.

Second, after forming your LLC you should of course have your LLC bank account that must be funded with the LLC capital. 

Third, forming your LLC in the wrong state. Many people think that by forming an LLC  in a state where there are no corporate taxes will help them avoid taxes. Yes, that is true but you will still be obligated to pay income taxes in the state you’re living in. 

The best state to form an LLC in, is the state where you live or operate your business.

Fourth, The registered agent. Don’t register your home or yourself as a registered agent because the job of the registered agent is to be available to accept services of the process during normal business hours every Monday through Friday. 

If you are willing to sacrifice holidays and vacations, yes be your own registered agent. If not, you should choose a registered agent to do the job for you.

Fifth, Always check if the chosen name for your new LLC has a .com domain name available.

But don’t worry after reading and following those steps you will not make any mistakes and your LLC will be formed without any mistakes.

The 5 Steps to Forming Your LLC Today in 2022

1. Choose Which State to Form Your LLC

Like I said before, the best state to form an LLC is the State that you are living in if you are working online as a freelance or content creator or to form the LLC in the state where you will conduct business in.

After choosing the state to form your LLC you must file articles of organization with the state filing office, often the Secretary of State. Some states call it a certificate of formation or certificate of organization. Don’t worry about those things now I will speak about it later.

If you form an LLC in another state and you are doing business in another state then you must register that LLC as a foreign LLC which will increase the formation and administrative costs.

2. Pick Up the Right Name for Your LLC

I’m not the type of person that takes a lot of time to pick a name for any new business that I’m starting but you can take your time. The name of your LLC should be unique and not in the Secretary of State’s records and it should respect the state’s rules.

The Rules are not hard your LLC name needs to be unique and end up with the LLC keyword or Limited Liability Company or Limited Company, or an abbreviation of one of these phrases.

To find if the chosen name is already taken or not you can visit your state’s department website and search if there is any existing entity with that same name. Also before registering your LLC name search if a domain name .com for this name exists.

3. Find the Right Registered Agent

A registered agent also known as an agent for service of process, receives important legal documents, notices, tax documents, communications mailed by the Secretary of State, and other documents on behalf of your LLC. 

The registered agent should be available to accept services of the process during normal business hours every Monday through Friday. Like I said before, you can be your own registered agent but believe me, having a registered agent even if you have a small business will help you avoid a lot of headaches and legal issues.

Registered agents can also help you to form your LLC in any state with minimum Fees.

4.Create an Operating Agreement

Nearly every State in the US requires an operating agreement to form an LLC. It is like the backbone of your LLC. The operating agreement is a document that lists all the LLC members and how the LLC will be run, the day-to-day operations, and what you want to happen in certain circumstances.

For multi-member LLCs the operating agreement can be very important to write down with precision the role of each member, ownership, labor, and profits, and often heads off disputes among the owners.

To help you understand what an operating agreement looks like, here is its structure.

Get Help From Northwest Registered Agent to write your perfect operating agreement

5. File Your LLC With Your State

After finishing all the steps above, then you are eligible to file your LLC documents also known as Certificate of Organization, Certificate of Formation, or Articles of Organization with the Secretary of State’s office.

The filing fees vary across the U.S. A registered agent can also help you with the filing of your LLC from the comfort of your home without the need to go physically to the office.

6. Get an EIN (FEIN, FTIN)

Once your LLC document is approved by the Secretary of State then you will get a certification document which will help you obtain an EIN and also open a business bank account.

EIN stands for Employer Identification Number also known as a Federal Employer Identification Number (FEIN), or Federal Tax Identification Number (FTIN), and is like a Social Security number (SSN) for your LLC.

7. Open Your LLC Business Bank Account

Opening a separate business bank account for your LLC is not a legal requirement but it is a best practice to help you separate your personal account and expenses from your business which will make you a professional business owner.

This practice will also help you build business credit. You can choose any bank you want to set up your business account. It’s easy and fast.

Which Registered Agent Should You Choose to Form Your LLC With?

There are plenty of registered agents that can help you form your LLC from the comfort of your home. Here are the best-registered agents for 2022.

The Best Registered Agent for 2022

ZenBusiness

ZenBusiness is a well-known and quality registered agent service that has exceptional customer support and value. ZenBusiness also came with a range of tools that make the formation of the LLC easy and fast for a reasonable price.

ZenBusiness not only includes a year of registered agent services with its LLC formation packages but also offers exceptional value thereafter by protecting your business and privacy for a reasonable price.

For people looking for registered agent services only, ZenBusiness offers an attractive deal for you. ZenBusiness came with various formation packages aimed at helping small business owners realize their dream of starting, running, and growing a successful business. 

Benefits:

  • Documents submitted on your behalf (you’ll only be responsible for state fees)
  • Two free changes to your filings per year (state filing fees may still apply)
  • Annual filing report alerts
  • Low Subscription cost
  • Fast Filing
  • Expert Service
  • Simple Setup
  • And more benefits

CorpNet

CorpNet was founded by a husband-and-wife team in 2009, the company knows a lot about starting a small business from scratch. Today CorpNet is one of the registered agents for low-budget entrepreneurs who want to start their businesses as fast as possible. It is trusted by thousands of customers in the US.  

CorpNet is super simple you only need to fill two pages and voila your LLC is ready to be approved by the Secretary of State. CorpNet from its start formed more than 100,000 businesses with a 100% satisfaction guarantee.

One of the things that I like about CorpNet is its mission to inspire, educate, and support entrepreneurs and professionals in the business.

Benefits:

  • Simplicity
  • Name Availability Check
  • FREE Registered Agent Service (for a period depending on the package)
  • FREE Corporate Compliance Tool: B.I.Z.
  •  Business License Research Package
  • And more benefits

Northwest Registered Agent

Northwest is well known for its exceptional customer service and well-trained and experienced staff. They will help you throughout your business journey. Northwest takes your privacy very seriously, they have agencies in all states of America to help you with any problem you will encounter in any state.

Northwest provides all the tools you will need to set up your LLC and keep your Data private for a low cost. They will also protect you from receiving junk mail at your address by scanning all the mail and only forwarding the most important ones.

Benefits:

  • Lifetime support from local Corporate Guides
  • Address Privacy
  • Main Scanning and forwarding included
  • Excellent support

Incfile

Incfile also offers a lot of value for entrepreneurs with a low budget to form their LLCs. Incfile had helped over 800,000 businesses to get off the ground since 2004. Incfile makes the experience of forming an LLC easier and cheaper. 

It also lets you join a big community of like-minded entrepreneurs and learn from their experience. The Incfile resource center is a very helpful Learning Center for business owners.

Benefits:

  • One free year of registered agent services with LLC formation.
  • Easy to use Dashboard.
  • Access to a million like-minded business owners.
  • Excellent support service and guidance.
  • No hidden Upsales.

LegalZoom

LegalZoom is one of the most well-known registered agent services in America. Their services are good. They will help you form your LLC and start operating it. LegalZoom Platform is easy to use. The only downside for LegalZoom is that the prices are so high.

LegalZoom is the most expensive registered agent in the market so I will not really recommend it for small business owners who just want to get started.

 Benefits:

  • A team of experienced attorneys will help you
  • For medium size businesses

Summary

By forming an LLC you protect yourself, your partner, and your financials from any potential legal issues that can happen. It will also help you manage your taxes and business better.