If you are interested in learning how to form an LLC, this article will provide you with details about this business form and the process of forming an LLC. The process of forming the LLC is the same for both the single-member (one person) LLC or multiple-member LLC. The difference is in how the LLC is taxed - a single-member LLC is taxed as a sole proprietor, while a multiple-member LLC is taxed as a partnership.
A limited liability company (LLC) (sometimes mistakenly called a "limited liability corporation") is an accepted business form in all U.S. states. An LLC is formed in a state and has "members" (similar to partners).
The people running an LLC are "members." Learn about members - their duties and liabilities.
Even if you do not plan on hiring any employees, you should still obtain an Employer ID (Tax ID) for your LLC. The process of completing an EIN application on Form SS-4 can be done online, by phone, or through your attorney.
In most states, you will need to register your LLC with your state by filing Articles of Organization with your state's business division (usually in the office of the state Secretary of State. You will need to gather information and make some decisions for this filing, and the format varies by state. Here's a link to the state Secretary of State websites
for all states.
At this writing, only Iowa and Idaho require a Certificate of Organization to be filed, instead of Articles of Organization. Read this article to learn the requirements for filing the Certificate of Organization.
An operating agreement
sets out all of the decisions about the business, including member responsibilities and duties, how profits and losses are distributed to the members, and the effect on the LLC if a member dies, leaves, or is asked to leave.
If you plan to file your LLC taxes as a sole proprietorship (one member) or partnership (more than one member), you do not need to file this form. If you want to file LLC taxes as a corporation, you will need to complete this form.
If your LLC does business in more than one state, you will need to register as a "foreign" LLC in the other states. This article explains how to register as a foreign LLC.