How To Set Up An LLC In 7 Steps

Setting up a limited liability company LLC can be one of the most important steps in establishing your business. An LLC can offer your business liability protection as well as other perks. While the exact requirements for starting an LLC differ greatly by state. Here are a few general guidelines of what you can expect during the process. And for more detailed info, you can check out our guide to the best LLC services to help you get all your important documents in order

How to Set Up an LLC

You can use this seven-step guide to get started.

1. Decide on a Business Name

Marketing may be at the top of your mind as you consider names for your business. And while it’s important to choose the right name for branding purposes, your business name must also meet state law requirements.

In general, state laws won’t allow you to choose a business name that’s already being used by another business in your state. Most states also prohibit certain words that might imply you’re in a certain business, such as insurance or banking. And you’ll probably need to include some version of “LLC” or “limited liability company” at the end of your business name.

You can review your state’s LLC naming requirements and find out if the name you want is available by visiting the website of the state agency responsible for business filings. In most states, that’s the Secretary of State.

2. Designate a Registered Agent

Every state requires LLCs to have a registered agent. A registered agent is someone who receives official or legal documents (such as subpoenas) on behalf of the LLC. Once received, the registered agent will then pass on these documents to the person in charge of the LLC.

Anyone who is at least 18 years old can be a registered agent—and you’re allowed to name yourself or an employee. However, the agent must be available at an address within your state during normal business hours. You can also designate a company that provides registered agent services. This will come at a fee, of course; pricing for registered agents may cost more than a hundred dollars per year.

3. Get a Copy of Your State’s LLC Article of Organization Form

To establish your LLC as a legal entity, you’ll file a document with the state agency that handles business filings in your state. In most states, this document is called the articles of organization, but some states use a different name, such as a certificate of formation. Each state has a form you can use. To find your state’s form, go to the same website you used for business name research.

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4. Prepare the LLC Article of Organization Form

Each state will list its specific requirements and procedures for those trying to form an LLC.

Basic information you’ll need to provide includes:

  • Your business name

  • The address of your principal place of business

  • The purpose of the business

  • The way your LLC will be managed

  • Contact information for the registered agent(and in some states, the agent’s signature)

  • The duration of the LLC

When that’s complete, one or more business owners or organizers will need to sign the form.

Some states, such as Nebraska and New York, require you to publish a notice in the newspaper indicating your desire to register your LLC. This step needs to be completed before filing the articles of organization.

You can review your state’s LLC naming requirements and find out if the name you want is available by visiting the website of the state agency responsible for business filings. In most states, that’s the Secretary of State.

5. File the Articles of Organization

Check your articles of organization carefully before submitting them to your state. You’ll also need to pay a filing fee, which varies depending on the state where you’re forming your business.

When your formation documents are approved, you’ll be issued a certificate by the state to indicate your LLC is formally registered. Use it for other necessary tasks such as setting up a business bank account and getting a tax ID number.

6. Create an Operating Agreement

An operating agreement contains the details of the financial, legal and management rights of all members of the LLC. More specifically, it can include how profits will be distributed, how members leave the LLC and who contributes capital for the business. In essence, it should contain all relevant information pertaining to the operations of your LLC.

Many states don’t require an operating agreement, but that doesn’t mean you don’t need to craft one. LLCs with more than one member or partner will want to create one to ensure everyone agrees on their rights and responsibilities. Even solo business owners will benefit from outlining the details in writing.

Crafting your own operating agreement is one option, especially for single-member LLCs. And there are plenty of free templates online to get you started. For more complex situations such as LLCs with multiple owners, hiring an experienced attorney may be well worth the expense.

7. Keep Your LLC Active

Setting up your LLC is only the start. Once it’s formed, you’ll need to ensure your business remains in good standing with your state. . Again, refer to your state’s business filing website to look up current information on how to do so. You may need to file an annual report that updates information pertaining to your LLC and pay an annual filing fee.


Watts, R. (2022, May 5). How to set up an LLC in 7 steps. Forbes. Retrieved May 10, 2022, from

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