Limited Liability Company

Once you’re done forming your US LLC, you only have a few more steps to complete. Here’s what you’ll need to know:  

Step 1. Apply for an EIN 
The IRS tracks your business through a unique number called an Employer Identification Number. 

Step 2. Prepare an LLC Operating Agreement 
Your  LLC is required to have an LLC Operating Agreement. It can be completed in both written and verbal form. 

Step 3. Plan an Organizational Meeting 
There will be a lot of items to discuss when you begin your LLC. An organizational meeting will help make things clearer. It’s good to note that there are no requirements. 

Step 4. File a Statement of Information 
Some states such as Delaware, do not require you to submit a Statement of Information. 

An LLC has not been around for long as a type of legal entity. The first LLC law was passed in 1977.  

LLCs have one major similarity with the so-called ‘corporations’: limited liability.  

Corporate officers, directors, and shareholders cannot be held liable for any debts of the corporation unless they are liable under other laws. This is true only if management takes care to preserve the corporate formalities, such as maintaining separate bank accounts, holding regular meetings, making minutes of those meetings, and generally treating the corporation as a distinct entity under the law. If management fails to take the steps, then the law allows the "piercing of the corporate veil" which can subject officers, directors, and shareholders to individual liability. An LLC has the same protections from liability as the corporation—and the same vulnerability if not treated as a separate entity. 

LLCs also share a significant characteristic with partnerships, or, if the LLC is owned by a single member, with individual taxpayers. Income to an LLC is not taxed at the entity level. Instead, it is included in the income tax returns of the partners or single individuals who own the LLC. 

To organize an LLC, you must file a document with the state in which the LLC is to be created. This document is usually called the Articles of Organization, but sometimes it is called something else, depending upon the state. The Articles of Organization state the name of the LLC, its business address, and the types of business the LLC will engage in. 

The Articles of Organization also state the name and address of the registered agent for the LLC. The registered agent is the person or company that serves as the contact point between the state and the LLC. The registered agent also receives official correspondence from other businesses. 

How long it takes to get an LLC depends upon the state in which it is organized. In the past, organizers would mail Articles of Organization to the state, along with the required filing fee. Later, some states began authorizing fax filing. Today, most states have set up e-filing systems that allow the filing of various documents, usually including Articles of Organization for an LLC. 

Again, depending upon the state, registration of the LLC can be accomplished online in real-time. When that occurs, an LLC can be completely set up in only a day or two. However, other states have significant lag times, some in the range of two to three weeks for approval, even if the registration is filed online. 

Some states include on their websites the expected wait time to process a filing. Others state the date of the most current documents they have processed to give people an idea of how long it will take for approval of a filing. 

In short, it can take between a day or two and the better part of a month to organize an LLC. 

State filing fees vary greatly, from $40 to as high as $500. Your state of incorporation might also charge an annual fee to keep your LLC current. 

Both protect owners so they're not personally on the hook for business liabilities or debts. But, key differences include how they're owned (LLCs have one or more individual members, and corporations have shareholders) and maintained (corporations generally have more formal record-keeping and reporting requirements).