For many business owners, forming an LLC is one of the first and most important steps in starting and growing a new business. Business owners often form LLCs to limit their personal liability, increase legitimacy, enjoy tax benefits, and more.
Today we're going to walk you through the steps to forming an LLC. If you've already decided on a name for your LLC and are forming an LLC in Delaware, click here to form your LLC in less than five minutes.
1. Decide on a name for your LLC
Deciding what to name your business can be a challenge. Additionally, if the name you choose is already taken, you may not be able to use it.
The good news is that what you name your LLC does not necessarily have to match your business name. Should your business name be unavailable to register as an LLC, you may be able to file a DBA (Doing Business As).
You will also need to decide what company ending you'd like to use. For an LLC, your official company name must contain LLC, L.L.C., or Limited Liability Company.
2. Choose Your State
Just because you or your business is located in one state does not necessarily mean you need to form your LLC in that state.
You may need to register for authority, sometimes referred to as “qualify”, to do business as a foreign entity in the State(s) of operation. Contact the Secretary of State/Commonwealth in that jurisdiction for more information.
The Incorporators Ltd. can help you form your LLC in the State of Delaware. Business owners often choose to incorporate in Delaware for a variety of reasons including tax benefits, transferability, our specialized courts, and more.
Learn more about why Delaware is home to more than 1,000,000 business entities and over 65% of Fortune 500 companies.
3. Select a Registered Agent
The general duties of the Registered Agent are to accept and forward Annual Report Tax Notices and any other official documentation from the Secretary of State to the entity contact; and to accept and forward Service of Process. Under Delaware law, a Registered Agent must be generally available during normal business hours to accept Service of Process. You can read all about Registered Agents here.
If your business is located in the state you choose to form an LLC, you may choose to act as your own registered agent. If not, you'll need to select a registered agent.
The Incorporators Ltd. annual Registered Agent fee is $99.00. The first year fee is FREE with one of our affordable Incorporation packages.
4. Create an Operating Agreement
If you've opted to form your LLC with The Incorporators Ltd., you can skip steps 4 and 5. We take care of those for you!
An Operating Agreement is the governing document under which an entity operates; setting policies, defining duties and addressing other operational considerations. They are generally adopted by the initial Members. They must conform to Delaware Law, and may be amended from time to time.
5. File the Certificate of Formation
The Certificate of Formation is the the document that is filed with the Secretary of State in order to form an LLC. The state of Delaware provides example Certificate of Formation forms for an LLC here.
The Delaware Division of Corporations encourages you to contact a registered agent in Delaware for assistance with filing the Certificate of Formation.
If you choose to file your Certificate of Formation yourself, you'll need to contact the registered agent you have named in your document. If you don't, and the agent is unable to contact you, the registered agent will resign their representation, which will forfeit the entity charter. If you'd like to name The Incorporators Ltd. as your registered agent, you may do so here.
6. File for an EIN
An EIN is an Employer Identification Number assigned by the IRS. When you form an entity with The Incorporators Ltd., we provide you with the paperwork you need to file for an EIN.
You can learn more about EINs on the IRS website.
7. What to do after you start your business
Many business owners get to this point and aren't sure how to proceed. Once you officially start your business by forming an LLC, it's easy to be overwhelmed by the next steps.
We've got a few great suggestions about what to do after you start your business.
8. Don't forget, corporate compliance saves you money.
It does! Here's how.
Starting an LLC doesn't have to be difficult or overwhelming. The Incorporators Ltd. offers a variety of LLC formation packages with options for every business owner.