What are the requirements for starting an LLC?

Starting a Limited Liability Company (LLC) in the United States involves a series of legal and state-specific steps. While the process can vary slightly depending on the state, the general requirements for forming an LLC include the following:

1. Choose a Business Name

Unique Name: The LLC's name must be unique and not already in use by another business in the state where you are forming the LLC. Most states have an online database where you can check name availability.
LLC Designation: The name must include a designation such as "Limited Liability Company," "LLC," or "L.L.C." to indicate its legal structure.
Restricted Words: Some states have restrictions on the use of certain words in the LLC name (e.g., "bank," "insurance," "university"), which may require additional permissions or licenses.

2. Appoint a Registered Agent

Registered Agent: An LLC must designate a registered agent in the state where it is formed. The registered agent is responsible for receiving legal documents, tax forms, and official notices on behalf of the LLC.
Requirements: The registered agent must have a physical street address in the state (not a P.O. Box) and be available during normal business hours. The agent can be an individual resident of the state or a business entity authorized to act as a registered agent.

3. File Articles of Organization

Articles of Organization: This is the primary legal document required to form an LLC. It is filed with the state's business filing agency, typically the Secretary of State.
Contents: The Articles of Organization usually include the LLC’s name, the registered agent’s name and address, the purpose of the LLC, the management structure (member-managed or manager-managed), and the names of the LLC members or managers.
Filing Fee: There is a filing fee for submitting the Articles of Organization, which varies by state but typically ranges from $50 to $500.

4. Create an Operating Agreement

Operating Agreement: While not always legally required, it is highly recommended that an LLC create an Operating Agreement. This internal document outlines the ownership structure, management responsibilities, voting rights, profit distribution, and procedures for adding or removing members.
State Requirements: Some states require an Operating Agreement, while others do not. Even in states where it is not required, it’s a crucial document for establishing the rules and operations of the LLC.

5. Obtain an Employer Identification Number (EIN)

EIN: An Employer Identification Number (EIN) is issued by the IRS and is used to identify the LLC for tax purposes. It is similar to a Social Security Number for a business.
Application: You can apply for an EIN online through the IRS website, by mail, or by fax. The EIN is required if the LLC has employees or multiple members, or if it elects to be taxed as a corporation.
Banking: An EIN is often required to open a business bank account, file taxes, and obtain business licenses.

6. Comply with State and Local Licensing Requirements

Business Licenses and Permits: Depending on the nature of the business and its location, the LLC may need to obtain various licenses and permits to operate legally. This can include state licenses, local business licenses, health permits, zoning permits, and others.
Industry-Specific Requirements: Certain industries, such as healthcare, construction, or food services, may require additional regulatory compliance and specialized permits.

7. Publication Requirement (If Applicable)

Publication: A few states, such as New York and Arizona, require newly formed LLCs to publish a notice of formation in a local newspaper for a certain period.
Proof of Publication: After completing the publication requirement, the LLC must submit an affidavit of publication to the state to finalize its formation.

8. File Initial Reports (If Required)

Initial Report: Some states require LLCs to file an initial report shortly after formation, typically within 30 to 90 days. This report often includes basic information about the LLC, such as its name, registered agent, and business address.
Fee: There may be a filing fee for the initial report, and failure to file can result in penalties or the loss of good standing with the state.

9. Register for State Taxes (If Applicable)

State Tax Registration: Depending on the state and the nature of the business, the LLC may need to register for state taxes, such as sales tax, employer taxes, or franchise tax.
Tax ID Numbers: In addition to an EIN, the LLC may need to obtain state tax ID numbers for payroll, sales tax, or other specific taxes.

10. Annual Reports and Ongoing Compliance

Annual/Biennial Reports: Most states require LLCs to file annual or biennial reports to keep their information current with the state. This report typically includes information such as the LLC's principal office address, registered agent, and members/managers.
Filing Fee: There is usually a fee for filing these reports, and the amount varies by state.
Ongoing Compliance: LLCs must maintain compliance with state laws, including paying required fees, filing annual reports, and adhering to any other state-specific requirements.

11. Foreign LLC Registration (If Operating in Multiple States)

Foreign LLC: If the LLC plans to do business in states other than the one in which it was formed, it may need to register as a foreign LLC in those additional states.
Filing Requirements: This typically involves filing a Certificate of Authority in a foreign state and paying additional fees. The LLC may also need to appoint a registered agent in each state where it is registered.

Summary

Starting an LLC in the United States involves choosing a unique business name, appointing a registered agent, filing Articles of Organization, and possibly creating an Operating Agreement. Additionally, you must obtain an EIN, comply with state and local licensing requirements, and ensure ongoing compliance with state regulations, including filing annual reports and paying necessary fees.

Each state has its specific requirements and fees, so it’s important to consult your state's Secretary of State or equivalent agency for detailed instructions. Legal or professional advice may also be beneficial to ensure all steps are properly completed.