How To Set Up An LLC

Daniella Perry Siegel
4 min readOct 8, 2020

Forming a Limited Liability Company (LLC) can seem like an overwhelming task especially if you consider the penalties associated with missing compliance deadlines or not filing official documents properly, which can cause the state to dissolve your business. Here are the 10 steps on forming an LLC to help you avoid just that.

10 Steps on How to Setup an LLC

Select Your State

The best option for most business owners is to set up an LLC in the state where you reside or operate your business from. If your business has storefronts or offices in different states, then you’ll also need to register or qualify your LLC in those states.

Get a Copy of Your State’s LLC Articles of Organization Form

You can obtain this form online from the Secretary of State website. Depending on your state, you may be required to post a notice of formation in the newspaper for your Limited Liability Company.

Decide On A Name For Your Business

You need to choose such a business name that does not contain any of your state’s list of prohibited names. Make sure that no other entity or LLC on file in the same state has the same name.

The name should also end with an LLC designator like “LLC” or “Limited Liability Company”.

Pick A Registered Agent

A registered agent is someone authorized and obligated to collect legal papers on behalf of your LLC. It is also a requirement if you are registering outside of your home state.

Choose Between Member vs. Manager Management

Choose a member-managed LLC [1] if you are operating the LLC as the owner, or a manager-managed LLC if it is operated by an appointed manager who might or might not be a member of the LLC.

Prepare the LLC Operating Agreement

Your LLC operating agreement must include all the financial and management rights and responsibilities that the LLC members hold. It should be clear on specific guidelines including when and how the profits and losses should be distributed among members.

It may also have clauses on who can contribute additional funds and the circumstances under which a member can leave among others.

File Your LLC with the State

Every state has its own set of rules that need to be followed while setting up an LLC. You need to file the following:

· Name and address of LLC

· Length of the LLC’s existence

· Name and address of the registered agent

· Purpose of the LLC

In most states, the filing needs to be done with the Secretary of State. A filing fee is also required. This process might be overwhelming for some, so hiring a good LLC service provider can definitely help.

Comply with the Regulatory Requirements and Taxes

You must prepare and update an operating agreement to form an LLC.

You will also need to comply with all regulatory reporting requirements and taxation liabilities to set up an LLC, such as franchise tax and property tax.

Obtain Certificate from the State

After you have filed your LLC and paid the filing fee, the documentation needs to be approved by the state. The state will issue a certificate and other documentation to confirm the legal incorporation of your business.

File Annual Reports

You need to file your LLC’s annual report that would include the profit, loss and all the key activities of your LLC in the prior year. You can file your annual report for your business online via the state website.

Optional Steps

Get an EIN

You need to obtain a federal tax identification number or federal employer identification number (EIN / FEIN) for your business or corporation to conduct business activities. One example of this is hiring employees for your business or corporation.

These additional steps after LLC formation can also be handled by your chosen LLC formation company or legal services. Some of the companies that offer these additional services are ZenBusiness, LegalZoom, Inc file, and others.

Register Your LLC in the Other States

If you want the LLC to conduct business in one or multiple states other than the one you’re registered in, then you will need to register your LLC in all those other states as well. For this, you will need to fill out and submit similar paperwork pertaining to your business and also get a registered agent at each of these states.

Frequently Asked Questions

Can I set up an LLC myself?

Yes, you can set up the LLC yourself. You will need to complete all the business documents on your own.

Should I use a lawyer to form an LLC?

You should use a lawyer to form an LLC if you anticipate some complexity with filing the documents for your business or have additional considerations. One other benefit is that your attorney can ensure that your filing is in compliance with state regulation and advise you on the best structure for your business.

What is the average cost to set up an LLC?

The average cost to set up an LLC ranges from $40 to $500, depending on the state.

What is the fastest way to set up an LLC?

The fastest way to create an LLC is by applying online through the Secretary of State’s website.


One reason why an LLC business structure has gained popularity is the ease of forming an LLC and fewer reporting requirements for your business. However, it’s important to make sure you file all the required documents and LLC operating agreements correctly. These should also be before the deadlines to avoid any state penalties.



Daniella Perry Siegel

I’m Daniella. I love to try different stuff and share my feedback and my thoughts about them. Hope you enjoy my blog. Thank you!