How to Form an LLC
The process of transitioning from a sole proprietor to a single-member LLC can be intimidating. However, it doesn’t have to be! With the right planning and guidance, the process can be relatively straightforward.
Forming a single member LLC offers many advantages, including limited liability protection of your personal assets, the ability to deduct business expenses on your taxes, and access to helpful funding opportunities. A single member LLC also offers more credibility than a sole proprietorship because it is an official legal entity that exists separately from its owners.
The simplest way to form your own company is to allow one of our Trusted Advisors, Northwestern Registered Agent, to form and maintain your company registry annually going forward. Click on this link below for a less-stress process!
Up for a challenge? You could do it yourself by following our recommendations below. Do remember that you will have to “renew” your company registration annually or you could have Northwestern Registered Agent do it for you
Steps to Becoming a Limited Liability Corporation
In general, the steps for forming an single member LLC include:
Choosing a business name is an important first step in forming an LLC. When choosing the perfect name, it’s important to make sure that it is unique and not already being used by another business.
Once you’ve chosen your desired name, make sure to double check with the state government to ensure that the name isn’t already taken. If the state finds your desired name is already in use, you can simply choose a slightly different version or combine words from prior ideas into something new.
In Florida, for example, you would start that process at https://dos.myflorida.com/sunbiz/
An EIN (Employer Identification Number) is a 9-digit number issued by the IRS that identifies businesses and their tax accounts.
All businesses, including single member LLCs, must have an EIN to open a bank account, file taxes, and apply for business licenses. Obtaining an EIN is free and easy to do using the IRS website.
The next step for forming a single-member LLC is filing organizational documents with your specific state government. Depending on your location and individual needs, you may need to file articles of organization or similar documents. Additionally, you will also likely need to pay a filing fee when submitting these documents.
Obtaining Business Licenses and Permits
After filing your organizational documents, you may also have to obtain business licenses and permits depending on the type of business you are running. This is applicable in some states and not others – so it’s important to check with your specific state government regarding what kind of licenses or permits you may need for your LLC.
Many cities and/or counties require you to register your business with them as well – make sure you find out so you stay in compliance.
Once you’ve obtained all necessary paperwork from the state and any other applicable agencies, open up a bank account in the legal entity’s name. Having a separate bank account gives you more credibility as an official business.
It’s also a good idea to get a business credit card, typically offered by the bank you choose for your business account. But you are welcome to get any type of credit card in your business name. That will help you track your expenses and help with separating your personal from your business life.
To ensure success as you transition from a sole proprietor to a single member LLC, it’s important to consult with professionals who are knowledgeable about business law in your state. Additionally, make sure you understand the necessary steps for setting up and maintaining an LLC so you can start off on the right foot! With proper planning and guidance, forming a single member LLC doesn’t have to be a stressful process.
Using a service such as Northwest Registered Agents can be extremely helpful when forming an SMLLC. They have experience working with all 50 states, so they will be able to ensure that your LLC is compliant with each state’s business laws. Furthermore, their services are designed for customers who need help navigating the entire process of forming an SMLLC.
Northwest Registered Agents offers their customers access to step-by-step guides and resources that explain how to form an LLC in any state. This makes it easier for first-time entrepreneurs to understand the requirements and paperwork associated with forming an SMLLC in their desired state. The company also helps customers maintain their LLCs by providing ongoing support such as filing annual reports and keeping track of important deadlines.
Overall, transitioning from a sole proprietor to an SMLLC can be daunting, but it doesn’t have to be. With the right preparation and guidance, you can easily form your LLC and start taking advantage of all its benefits. Furthermore, services such as Northwest Registered Agents can help make sure you’re in compliance with each state’s business laws so that you don’t run into any legal problems down the line. Good luck!
Good luck on your journey as a business owner! If you need any assistance along the way, please don’t hesitate to reach out for help from professionals who specialize in starting and maintaining successful SMLLCs. The team at Northwest Registered Agents is there for you.
BONUS: BIG Advantages in Becoming an S-Corp
Become and S-Crop now for FREE! Just fill out this IRS Form 2553
Note: This content was prepared for informational purposes only and is not legal advice. All content is accurate as of the date of publishing. Please consult with a licensed attorney in your jurisdiction to receive legal advice.