Turn Your Business Idea Into an LLC
Do you already have a business idea? Perhaps you have been inspired to switch career paths by starting 2021 with a new career. Starting a business isn’t just about deciding that you are going to start one. You need to take your business idea and structure it in a specific way. One recommendation for small businesses is to create a limited liability company, commonly referred to as an LLC.
The main characteristics of an LLC are that it enables business owners to not be held liable for their company’s debts, and also allows them to select their own management structure for their business. These characteristics can definitely benefit any business owner, which is one of the reasons why so many small business owners make establishing an LLC the first step in setting up their new business. Establishing an LLC isn’t hard, butmay seem confusing to first-time entrepreneurs. We’ll take you through step-by-step and help you get started.
How To Set Up An LLC
The first step is to choose the state where you want to set up your business. For most people, this will be the state where they live. If you plan to have a physical presence in more states, you will need to register your LLC in each of the states where you plan to do business.
Once you have determined where to set up your business, you need to name our business. Keep in mind that the name of your business must either include “limited liability company” or the abbreviation L.L.C. or LLC. And you can‘t include words that may lead someone to believe that your business is a government agency.
Most states require that you use a registered agent for your LLC, and they must also be a resident of the state where your business will be located. A registered agent sends and receives legal documents on your behalf.
Next, register your LLC with the state/s where you will do business. Most states require a formation document called the “articles or organization” or the “certificate of formation” and the fee for filing your business with the state to be sent in by mail or online. In addition to the certificate and the fee, you will need to send:
- Full names and contact information for the LLC’s founders
- The name and address of your business
- The amount of time that your company has been in existence
- General information about the registered agent
- General information about your LLC, such as a mission statement and explanation of purpose
Since LLC status allows you to determine your business’s management structure, you now must determine whether you would like your business to be member-managed or manager-managed. In a member-managed company, a number of LLC members are involved in running the company. In a manager-managed company, members are not involved in the running of the company and that responsibility is placed with the manager or managers of the LLC.
You will need to develop an LLC operating agreement, which is a legal document outlining the structure of your LLC and the roles of the different members. Usually this is not a requirement, but it can still be a good idea to create one as an additional protection for your business. This is where you outline how the company’s profits will be distributed and to whom and how the company is managed or who makes decisions.
Now, let’s get down to business. Obtaining an EIN for your business can be as easy as using your own Social Security Number, if you meet certain requirements. An EIN, or Employer Identification Number, is the same thing as a Social Security Number for an individual, but usually applies to businesses. An EIN is required in order to hire employees or open a bank account for your business. To get an EIN, go to the Internal Revenue Service’s website. In each state in which you will be doing business, you will need to apply for a sales tax identification number from the state’s tax department and register with the state’s labor department.
Once you have that, you can open a business bank account. It is important to separate the finances for your business from your personal finances. Otherwise, you may still be held liable for debts, even with an LLC. Keep in mind that for every state that you wish to do business, you need to register — and you don’t want to make mistakes when it comes to the IRS.
Now You Can Register And Offer Your Services On OneBook!
Once you have set up your LLC, you can register with OneBook and easily get your first clients! Keep in mind that OneBook requires that businesses be registered as an LLC in order to offer services on the platform, so creating your LLC is mandatory. Thankfully, we have provided information on each of the steps in this article, and the process is fairly simple.
Feeling ready to work?
Register your company as an LLC and start advertising your business to your future clients on OneBook!