A Few Words, Before You Start
Starting a business is an exciting journey, which also comes with important decisions to be made.
One of these decisions is choosing the right legal structure for your company. A limited liability company (LLC) is a popular choice for many entrepreneurs because it offers personal liability protection and is relatively easy to set up.
We’re here to walk you through the step-by-step process of forming an LLC and explain how Tailor Brands can help, so that you can focus on growing your business with peace of mind
What is an LLC?
A Limited Liability Company (LLC) is a business structure that helps shield owners (called members) from personal liability for business debts, legal obligations, and lawsuits - meaning their personal assets are generally not at risk.
Filing for an LLC generally involves paying a fee directly to the state during the submission process.
Choose a Name for Your LLC
The first step in filing for an LLC is choosing a name for your business. Your LLC's name is how your business will be identified and recognized by customers and the government. It's important to choose a name that represents your brand and is unique, as it will help you stand out in the market.
To begin, you'll need to check if your preferred business name is available by searching the online database of your state's Secretary of State's office. Keep in mind that the name availability will also depend on your business industry.
If you’re using our LLC service, just provide your preferred business name, and an alternative name (in case your first name is unavailable) and we'll take care of the process for you.
Choose a Registered Agent for Your LLC
The next step in filing for an LLC is choosing a registered agent for your business. A registered agent is a designated individual or business entity that acts as the link and point of contact between an LLC and the state it's registered in. The registered agent receives various legal documents, tax forms, government correspondence, and notifications of a lawsuit from the State on behalf of the LLC.
It's important to choose someone who meets the legal requirements and can reliably handle these responsibilities promptly and effectively - the registered agent must have a physical street address (not a P.O. Box) in the state where you're forming your LLC and be available during business hours, among other requirements.
At Tailor Brands, we offer a registered agent service to help ensure your business stays compliant with state requirements. Our registered agent services provide a reliable way to receive formal business documents from the state on your behalf, giving you peace of mind that your LLC is in good hands.
Note that the Registered Agent or its address is strictly for receiving and forwarding legal mail. They can’t be used as a business or mailing address, and the Registered Agent doesn’t file any documents or forms on your behalf.
A Registered Agent is essential for LLCs in all states and receives critical documents for you, such as legal notices, government correspondence, and lawsuit notifications.
Add Information on Owners of the LLC
Another important step in forming an LLC is adding the information of the LLC owners, known as “Members”. LLC Owners manage the LLC, and depending on the state, their information may need to be provided. Be sure to include the full name and address of each owner, as well as their percentage of ownership in the LLC.
Tip: List all owners’ information, including yourself, even if you already provided this information. Owners can be individuals and business entities.
Add Information for the LLC's Business Address
The LLC’s Business Address is the physical location of the business where official correspondence and legal documents can be sent. It's important to note that a P.O. box cannot be used as the business address, as it is not a physical location.
Be sure to provide a complete and accurate business address for your LLC's physical location, including the street name, building number, and suite or unit number if applicable.
Note that a home address can also be used as a business address. It's important to keep in mind that this information may be included in the public records, so it's important to ensure that it is up-to-date and correct.
In the states of Delaware and Wyoming an international business address can be provided.
State the purpose of your Business
The purpose of your business should be a general statement that describes the overall activities of your LLC. This purpose does not need to be specific or detailed, but it should accurately reflect the type of business you plan to operate.
Providing a vague or unclear purpose for your business can result in misunderstandings or confusion about the type of business you plan to operate. Make sure to provide a clear and concise purpose that accurately reflects the type of business you plan to open.
Maintain Compliance
Once your LLC is formed, it's important to stay updated and meet legal requirements. This includes filing the Annual Report, which is required by most states.
Failure to file your report on time may result in potential late fees, penalties, or even involuntary dissolution.
To help with this, Tailor Brands offers an Annual Compliance service which can be purchased along with an LLC. The Annual Compliance Service includes the Annual Report filling, as filing an annual report is required by most states to keep your LLC in good standing and avoid potential penalties or involuntary dissolution.
Add an Operating Agreement
While an operating agreement is not a requirement for LLCs in all states, it's highly recommended to have one in place. An operating agreement outlines the daily operations of an LLC, as well as the course of action if a conflict arises or a member needs to leave the business (by choice or for other reasons). The agreement can also include member details, such as their duties and contributions in the agreement.
Once the operating agreement is complete, it should be added to your LLC's records for safekeeping. Having an operating agreement can help prevent future disputes and help the LLC run smoothly.
Determine If You Need an EIN
An important step in opening a business is determining if you need an Employer Identification Number (EIN). An EIN is a federal business tax ID that works like a Social Security number for your business.
Many of your business's financial matters, such as opening a bank account, paying taxes, and hiring employees, will depend on this number.
If you're planning to hire employees or are taxed as a corporation, partnership, or LLC with multiple members, you'll need an EIN.
An EIN can usually be obtained online. However, for non-US citizens without a Social Security number, the application is usually processed via fax or mail and can take a longer time to obtain.
At Tailor Brands, we can help you obtain an EIN for your business. This can be purchased when filing your LLC application or after your LLC has been completed. Our EIN services provide a quick and easy way to get your EIN, so you can focus on other aspects of your business.
Conclusion
Starting a business requires many steps and can feel overwhelming with all of the requirements and decisions to be made. That's why we're here to help with the process, allowing you to focus on running your business.
If you’re ready to get started filing your LLC through Tailor Brands, click here
Our friendly support team is here for any questions, so feel free to reach out if we can help!
Please note that legal laws and regulations are subject to frequent changes. While we aim to provide helpful information, it's important to understand that this page serves only for informational purposes and does not provide legal or tax advice.