6 Steps To Form A Limited Liability Company (LLC)

Dec 12, 2022 7 Min Read

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"Forming an LLC is one of the most effective strategies to boost wealth."

Starting and running your own business enterprise is one of the most effective strategies for earning a living. It allows you to plan your schedules and gives you the freedom to do what aligns with your personal goals. This may explain why most people consider starting their own companies instead of looking for white-collar jobs. 

When you decide to launch a company, your first major challenge comes in deciding the business structure it will have. After understanding the steps to form an LLC, it’s crucial to find a reliable partner that makes the process smoother.

Fortunately, there are many resources available to help entrepreneurs with this task, including a list of online formation services for LLCs. These services can provide guidance on the pros and cons of each business structure and can help you choose the one that is right for your corporation. 

This may interest you: 9 Things You Didn’t Know Your Small Business Needs

There are several forms of company structures you can consider. And one of them is a limited liability company (LLC).

This guide will introduce you to the basic steps for setting up a limited liability company. If you want to learn more about this topic and other important facts, such as learning what makes Legalzoom good for LLC, you’ve come to the right place.

An Overview Of Limited Liability Company

A limited liability company is a form of business entity that combines the characteristics of a corporation and a partnership. It protects its members from the liabilities of the company like a corporation. For instance, an LLC will be liable for its debts, not its owners. That's a feature of corporations which does everything under their own names. 

At the same time, LLCs don't pay taxes on their own names. Instead, members will have to pay taxes from their share of profits or earnings. And that's a characteristic of a partnership business structure.  

There are several benefits of forming an LLC company. For insurance, firms with this structure will have perpetual existence. That means a member's death, retirement, or resignation doesn't mean the company will cease to operate. Instead, it can continue generating revenue for the foreseeable future so long as there are people interested in continuing its operations.  

Explore: 5 Things To Do After Registering Your Business Trademark

Besides, as noted earlier, the company won't have to pay taxes on its own name. That helps reduce expenses to enhance profitability. And because an LLC company is responsible for its debts and other financial liabilities, you won't be worried about losing your personal assets.

How To Form An LLC  

There are various steps you need to take to form an LLC. Here are the essential ones:

(1) Find A Registered Agent

It's a legal requirement to have a registered agent if you're going to form an LLC. This is a person or a company that'll be receiving government correspondences, compliance documents, and service processes on behalf of your enterprise. After receiving them, they'll pass these on to the person running your LLC. 

man writing on paper

Apart from receiving documents on behalf of your company, a registered agent will also help you stay compliant with the law by informing you of legal notices. Typically, a registered agent is like a watchdog for LLCs to ensure owners take appropriate actions to deal with potential problems on time. Ensure you select the most suitable registered agent within your region. This GovDocFiling review of registered agent services NW Registered Agent and LegalZoom is a good place to start.

(2) Select A Business Name

Deciding on a business name is another important step when forming an LLC. This is a title that can be identified with your products or services. It should therefore represent your brand. 

Supplementary reading: Infographic: 3 Practical Steps To Create A Great Brand Name

While selecting the best name for branding purposes is important, it must also align with state law requirements. For instance, in most states, you won't be allowed to use a name already registered with another enterprise. Some even prohibit the use of certain words in business names. 

woman placing sticky notes on wall

Before you settle on a name, check if it's not being used by another firm. You can do that online or physically visit the secretary of the company's office. After that, you may want to preserve the name while waiting for your business registration. But you must pay the required name registration fees to your local regulatory board.

(3) File Articles Of Organisation 

Also known as a certificate of formation, articles of organisation are legal documents used to establish an LLC. They include things like the name of your company, registered agent, and names of members. These materials are also used to outline the rights, duties, and liabilities of each company member.  

Like preserving your company's name, the state also requires you to pay some fees when filing your articles or organisation. Therefore, you need to research to know how much is required from you before you get started.  

Read more: Required Documents To Obtain When Starting A Business

(4) Establish An Operating Agreement 

Writing an operating agreement isn't a legal requirement. So, it might seem fitting not to have it. However, it'll play a crucial role in the growth and success of your LLC. It can also be used in solving internal disputes. For these reasons, you should still include it in your preparations.  

An operating agreement is a document that customises an LLC's terms according to the owners' specific needs. It indicates the legal and managerial rights of each member. Plus, it outlines how the earnings are to be distributed among them. 

woman signing on white printer paper beside woman about to touch the documents

Ideally, an operating agreement has all the relevant information relating to the operations of your LLC. 

(5) Obtain Operating Licenses And Permits

Before you launch your LLC, you need to obtain an operating license and other permits. You can do this by registering the business with the state through your local regulatory board. 

After ensuring you have all the requirements needed, visit the relevant authority for company registration. Alternatively, you can do it online. But you must attach all the necessary documents for a successful registration. 

Once you register your LLC, you'll obtain a master's license. This is an official document showing that your LLC is legally registered with the state. From there, you need to find other licenses or permits specific to your enterprise.  

(6) Launch Your LLC

After successfully registering your LLC, you may want to launch it. However, you must promote your products or services to increase their visibility. That enables you to connect with more customers in no time. 

This may interest you: Right Time to Launch A Business

In addition to launching your LLC, you also need to keep it active. You can achieve that by ensuring it remains in good standing with the state. For instance, you may want to file annual reports to update the details of your business.


Forming an LLC is one of the most effective strategies to boost wealth. However, establishing one can be overwhelming, especially if you don't know what to do. But with the steps above, you can be guided as you start forming one for your dreams. Never hesitate to talk to experts to learn more.

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Danesha Khalil is a business coach who shares her expertise in management with startups. She writes blogs and holds seminars in communities that need aid in establishing sustainable commercial relationships. She spends her weekends with her husband and kids at the park.


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