California LLC Steps
California LLC
How To Start an LLC in California
California is a great place to start a business. The economy in this state ranks fifth in the world, just behind the U.S. as a whole, China, Japan and Germany. Between 2015 and 2019, the Golden State grew faster than three out of the four highest economies. Only China’s economy grew faster (29% compared to 22%).
Small businesses are important to California’s economic health. They make up 99.8% of all businesses in the state. In 2019, there were around 4 million small businesses registered in the state. These companies employed nearly half of the state’s workers. Your new company will join these numbers and contribute to this state’s healthy economy. Follow these steps to get your company off the ground.
Step 1
Choose a Name for Your Limited Liability Corporation
The first step in the process is to pick out a name for your LLC. There are a few rules you must follow when you choose a name. California law says that your company name:
- Can’t contain any words that people may confuse with a government entity
- Can’t be the same as any other business registered in the state
- Must contain the phrase “limited liability corporation” or another recognized form, such as LLC, Limited, or Ltd
Once you decide on a name, you must make sure it isn’t already in use by a registered LLC in California. Use the Secretary of State’s business search tool to find out if another LLC is operating under the same name in the state.
After you make sure your name is compliant and available, it’s a good idea to see if the domain name is also available. Most small businesses in today’s tech-centered world have a website for their company. If the domain name is available, you may want to secure it right away.
Step 1
Choose a Name for Your Limited Liability Corporation
The first step in the process is to pick out a name for your LLC. There are a few rules you must follow when you choose a name. California law says that your company name:
- Can’t contain any words that people may confuse with a government entity
- Can’t be the same as any other business registered in the state
- Must contain the phrase “limited liability corporation” or another recognized form, such as LLC, Limited, or Ltd
Once you decide on a name, you must make sure it isn’t already in use by a registered LLC in California. Use the Secretary of State’s business search tool to find out if another LLC is operating under the same name in the state.
After you make sure your name is compliant and available, it’s a good idea to see if the domain name is also available. Most small businesses in today’s tech-centered world have a website for their company. If the domain name is available, you may want to secure it right away.
Step 2
Designate a Registered Agent in California
Every LLC in California needs a registered agent (also known as an agent for service of process in California). This agent is the person who is responsible for receiving legal documents, tax forms, government notifications and lawsuit notices.
You can choose yourself to act as the registered agent, or you can designate someone else in the company. Some business owners choose a friend or family member to fill the role. Additionally, there are numerous registered agent businesses you can hire to serve in this capacity.
Step 3
Complete and File Your LLC California Articles of Organization
This next step is the one that actually forms your limited liability corporation. Every LLC needs Articles of Organization. This document is a legal form that lays out your company’s structure, including the rights, responsibilities, liabilities and powers for LLC members. Even if you are the sole member of your company, you still need to complete this document.
California offers online, in-person, or mail-in filing services for completing the Articles of Organization. The basic filing fee is $70. If you file online or by mail, you only pay this fee. When filing in person, the SOS tacks on an additional $15. This fee bumps up your processing time over mail-in orders.
Online and in-person applications usually take three to five business days to process. Mail-in applications take four to six days from the date the SOS receives your forms. You can check the SOS website to find out the receipt dates office is currently reviewing. If you need quicker service, the Secretary of State offers expedited services. For same-day processing, the fee is $750, and for 24-hour processing, the cost is $350. People who pay for preclearance services (a $250-$500 fee) can get four-hour processing for an additional $500.
Step 4
Obtain Your Employer Identification Number
The Internal Revenue Service assigns a nine-digit EIN to every business entity. The federal government legally requires this number, and the IRS uses it for tax purposes. An EIN is like your company’s Social Security Number. You will also use this number for filing state taxes, opening a business bank account and hiring any employees.
It won’t cost you anything to get your EIN. It’s important to note that the website times out after 15 minutes of inactivity. You also can’t save your application and come back to it later. Anyone who forms an LLC in California must obtain an EIN. Even if you currently have one for a sole proprietorship, you need a new one for your LLC.
Step 5
Create the Company’s Operating Agreement
California law requires limited liability corporations to have an operating agreement. This is an internal document you keep with your business files. The operating agreement identifies LLC members and provides ownership percentages. Your agreement should also outline operating procedures, profit and loss distributions, tax responsibilities and management structure. You need an operating agreement even if you are the only member of your LLC.
Step 6
Complete and File the Initial Statement of Information
Your Initial Statement of Information is due within the first 90 after you register your business. The statement includes general information about your company such as the business’s physical and mailing addresses, name of the registered agent and member names. If this form isn’t filed on time, you may be fined $250 and risk suspension or forfeiture. The filing fee is $20. You can complete your statement online, in person or by mail.
Step 7
Obtain Necessary Licenses and Permits
If your business industry requires special licenses, it’s important that you have these in hand before opening your doors. If your company sells goods or services at a physical location, you will likely need to obtain permits to operate from your local government.
How To Remain Compliant
Once your business is up and running, you have continued obligations with the state and federal governments to keep it going. It can be challenging to keep up with all the requirements, but it’s a necessary part of running your own company.
Pay the Annual Franchise Tax
The single biggest LLC California cost you have to pay when setting up your business is the annual franchise tax. Regardless of how much money your company makes, you must pay $800 every year to the California Franchise Tax Board. Even if your business is inactive, the state requires you to pay this tax until you cancel your LLC. Your first payment is due on the 15th day of the fourth month after you file your Articles of Organization. Every year after that, your payment is due on this same date.
Pay the LLC Fee
If you expect that your company will do more than $250,000 in business, you will also pay an annual LLC fee to the Franchise Tax Board. The amount you pay is based on your income estimate for the business.
Companies that bring in between $250,000 and $499,999 per year pay $900. Those that make $500,00 to $999,999 pay $2,500. If your business makes between $1,000,000 and $4,999,999, then you would pay $6,000. Any company making more than $5,000,000 pays $11,790. This fee is due on the 15th day of the sixth month of every tax year.
Pay All Taxes
Limited liability corporations have what is known as “pass-through” taxation for federal taxes. What this means is that you file your federal taxes for your LLC with your personal income taxes. In addition to federal taxes, you will need to pay state and municipal taxes.
FAQs
An LLC is a limited liability corporation, a legal business structure that provides benefits that are similar to a corporation while offering business owners greater flexibility. Structuring your company as an LLC California protects your personal assets from business lawsuits. Limited liability corporations can have one or more owners.
No. Most LLCs operate under their legal company name, using it for all aspects of their business. However, if you want to conduct your business under a name that is different from your limited liability corporation name, you can register your DBA name.
Your registered agent can be anyone who is a legal resident in the state where your business is registered. It can be a friend or family member, someone who works for your company or yourself. You may also choose a registered agent company to serve this role.
It depends on how you file. The Secretary of State’s offices processes online and in-person Articles of Organization in three to five business days. Mail-in submissions have the slowest processing times. The SOS offers expedited services for an additional fee. It costs $500 for a pre-clearance four-hour turnaround, $750 for same-day service and $350 for a 24-hour turnaround.
A domestic limited liability corporation is one that is formed in California and does business in California. A foreign LLC is one that was formed in another state or country and registers to do business in California. The process and fees for registering a foreign LLC are the same as for a domestic LLC.
Where To Get Help With Filing Your LLC California Documents
At GovDocFiling, we make it fast, easy, and free for business owners to complete the process with all the information they need. Are you ready to get started? Our partners at Inc Authority will file your Articles of Organization and provide Registered Agent services for one year for free, you only pay mandatory state filing fees.
Wyoming - LLC
Learn the Benefits of an LLC
There are many benefits to setting up an LLC in Wyoming. LLCs not only have more tax options, but they also offer decreased liability, reduced record keeping, and sharing of profits. They are simpler to set up and maintain, with much simpler rules and regulations. There is decidedly less registration paperwork and lower-costing startup expenses. The cost to form an LLC in Wyoming is not as high as it is for a Wyoming corp or S corp.
But is an LLC the right business structure for you? Some business types come with suggested business structures. For instance, many small business lawyers recommend you apply for an LLC in Wyoming for an e-commerce business. Why? With e-commerce businesses, products fall under product liability statutes. This means that anyone involved in the sale and distribution of the product could be held liable—even if the problem lies with the manufacturer. An LLC provides you with limited liability in case you are sued by creating a separate and distinct legal entity and isolating business assets from your assets. Therefore, compensation can only be taken from the LLC’s assets, not your personal assets.
If there is an issue with a product, an LLC protects you. Compensation can only be taken from the LLC’s assets, not your personal assets.
Start Your LLC Now
Besides protecting you and your assets, creating an LLC provides a business owner with more options for federal tax purposes.
- For instance, if an LLC has only one owner, it’s referred to as a single-member LLC or SMLLC. Owners have the option of being taxed as a Sole Proprietorship, an S Corporation, or a C Corporation.
- If an LLC has more than one owner, it’s categorized as a multiple-member LLC. Owners have the option of being taxed as a Partnership, an S Corporation, or a C Corporation.
An advantage to having a WY LLC with multiple members is that the members decide how to report profits and losses for tax purposes and have several options as to how they prefer to be taxed.
For federal tax purposes, if you’re the sole member of an LLC, your business is treated as a disregarded entity. This means that although you and your business are separate entities, the SMLLC’s income and expenses are reported on the owner’s personal tax return rather than an SMLLC tax return, and the IRS ignores the SMLLC’s status as a business entity. However, for purposes of employment tax and certain excise taxes, an SMLLC is still considered a separate entity. The way a sole proprietorship is taxed is the IRS’ default option for a Wyoming Single Member LLC.
In contrast, a WY corp only has two choices: S corporation or C corporation. A business operated as a sole proprietorship or a partnership also doesn’t have an option as to how it will be taxed.
For those wanting to open an LLC in Wyoming, the best part is the fact that it combines the liability protection of a C Corporation with the tax treatment of any of the above business entities. Plus, it is easier to set up than a corporation.
But Wyoming LLCs have a few disadvantages. If LLC owners do not choose to file for a tax status as a corporation, individual members pay high self-employment taxes. Also, if business owners decide they may want to take the company public and sell stock, a Wyoming LLC formation does not permit this (unless you file as an S corp in Wyoming). Despite these disadvantages, creating an LLC for your startup business is usually recommended. It is well worth it to protect your personal assets and simplify the process of forming an LLC in Wyoming.
Learn the Benefits of an LLC
For most folks looking to start a business in Wyoming, the best type of company to form is what's known as a Limited Liability Company (LLC). An LLC can:
- Run a business
- Hold assets (such as office equipment/real estate)
- Open a bank account
- Enter into contracts
Assign Member Roles
Now it’s the time to decide whether you will run this business on your own or with another member’s or organization’s assistance, how small or large you intend for your team to be, and which duties each member will have.
- Member-managed LLC - Member-managed LLC - These may consist of single or multiple members. Each member plays an active role in the management and operation of the business and has the authority to make decisions to bind the LLC. This is ideal if the business is small, has limited resources, and all members have management skills.
- Manager-managed LLC - These may consist of single or multiple members, but members must relinquish the authority to the manager and cannot interfere with the manager's operational decisions. This is ideal if your business is too large or complex to efficiently allow the sharing of management duties among all members, or if some of your members do not have management skills.
If you know your LLC will have employees, you also know that you will have to pay them. Plus, you will need to figure out the amount you should deduct from their wages for tax purposes. Employees will need to fill out a W-4 Form, and you will need to give them pay stubs with their tax information. Before this all gets overwhelming, keep in mind that we offer Payroll, Tax and HR compliance solutions with our partner, ADP. We make it easy to pay your employees, track time, and file taxes effortlessly. Plus, you and your employees can view and update payroll information via an app--accessible anywhere, anytime, backed by 24/7 live customer service support.
Assign Member Roles
Now it’s the time to decide whether you will run this business on your own or with another member’s or organization’s assistance, how small or large you intend for your team to be, and which duties each member will have.
Decide on a Registered Agent
Next, figure out who the Registered Agent for the LLC should be. The State of Wyoming requires every LLC in the state to have one. This enables the state to ensure the delivery of legal mail and that court documents can be tracked appropriately. The Registered Agent will also act as the contact point between the Wyoming Secretary of State and the LLC. Once you assign someone as your Registered Agent, they can receive official correspondence and documents on behalf of your business.
A Registered Agent can be either an individual who is a resident of Wyoming or a business entity that is authorized to conduct business in the state (but not your own business). This can be you or someone else within your company, but keep in mind that this person will be through whom the state has contact with your business. This agent will receive legal documents (known as “Service of Process”) that pertain to your business. You are legally required to have one.
- Possess a physical street address located in Wyoming (no P.O. Box address).
- Be available during regular business hours, typically Monday through Friday, 9 am to 5 pm.
Although the most comfortable option for a Registered Agent would be to name yourself, a friend, or a family member, know that this information will be public record. Not only will the information be searchable on the state’s LLC website, it can also be republished on other sites as well. If you work from home and would much rather keep your home address private, this might not be the best choice. An alternative you can look into is hiring Wyoming Registered Agent Services for the LLC. We also offer a Registered Agent Service for a small charge that you can include as an add-on to your shopping cart. That way, you can ensure that you have the most-dependable and best Wyoming Registered Agent for your LLC.
Decide on a Registered Agent
Next, figure out who the Registered Agent for the LLC should be. The Wyoming LLC requirement enables the state to ensure the delivery of legal mail and that court documents can be tracked appropriately.
Submit Your Articles
of Organization
While setting up an LLC in Wyoming, you will need to register an LLC in Wyoming by submitting what is called the Articles of Organization. The form includes information such as the LLC's name and address, the Registered Agent’s information, whether the LLC is run by managers or members, etc. If you also have a Wyoming Limited Liability Operating Agreement form written out, you would include a copy of it with the Articles of Organization in your records. Submitting your Articles of Organization is one of the Wyoming LLC requirements and the Articles of Organization is one of the most important State of Wyoming LLC forms you will need to file.
When filing your Wyoming LLC application, there are usually non-refundable fees that you have to pay with check or money order, additional fees for hand-delivery of Wyoming LLC forms, and long wait times whether in person or by mail--especially if you form a Wyoming LLC online during peak season. GovDocFiling can speed up the process for you. We offer an easy online application, expedited pricing, and a free business start-up guide and resources with all filings. You can apply here today.
Once your completed Articles of Organization Wyoming LLC form is accepted, congratulations! Your company now exists as a recognized legal entity that is authorized to conduct business within the State of Wyoming.
Submit Your Articles of Organization
As you get ready to apply for an LLC in Wyoming, you will need to register your Wyoming Limited Liability Company by submitting a form called the Certificate of Formation.
Obtain an Employer
Identification Number
One of the Wyoming LLC filing requirements is getting an EIN. Your LLC will need to file with the IRS for an Employer Identification Number (EIN), which is a nine-digit number assigned to businesses for tax filing and reporting purposes that allows the IRS to identify the taxpayer. (Note: you do not need an SSN to apply for an EIN, so international applicants are welcome.) Corporations, partnerships, and LLCs require an EIN, while sole proprietors do not. Instead, sole proprietors can use their Social Security Number, but that is not recommended as that exposes you to potential identity theft/fraud. In any case, it is a good idea to obtain one in case the company grows or for banking purposes.
Fortunately, you do not have to waste time dealing with the IRS on your own. Going through the IRS directly to get your EIN can be complicated, confusing, and frustrating. GovDocFiling alleviates the angst and aggravation of Wyoming business filing with the government, including applying for an EIN, or Tax ID number. Plus, GovDocFiling has one low price for same-day processing and delivery of your EIN (other Tax ID filing services charge more than $300 for same-day service!). Easily apply for your EIN/Tax ID online here. In addition, if you have any questions about obtaining an EIN, we offer 24/7 email and phone support to help you through the process. Emails are answered quickly at info@govdocfiling.com.
Once you designate how you prefer to be taxed, that decision must remain in effect for five years before being changed without approval from the IRS.
Obtain an Employer Identification Number
To open an LLC in Wyoming online, you are required to get an EIN. Your LLC will need to file with the IRS for an Employer Identification Number (EIN), which is a nine-digit number assigned to businesses for tax filing and reporting purposes that allows the IRS to identify the taxpayer.
Fill Out an Operating
Agreement
Once you’ve decided on member roles within your LLC, it is time to create a business contract that holds members to their assigned responsibilities. A Wyoming Operating Agreement form is a legal document that determines the financial and working relationships among business owners, members, and managers. Member duties would be explained and “what if” scenarios would be covered (such as what happens if a member leaves the LLC). If you do not have an LLC Operating Agreement in Wyoming set up for your business, when something unforeseeable happens, it will be up to the state to decide how to proceed justly, and this may not be what you want.
While it is not a necessary part of a Wyoming LLC registration to have an Operating Agreement, it is still extremely important to have one in order to protect your business.
You can have a lawyer look over your Wyoming LLC Operating Agreement form prior to submitting it. Get the legal advice you need to protect you and familiarize yourself with Wyoming LLC law with our partner, our partner Rocket Lawyer. Your company is responsible for maintaining copies of the Operating Agreement.
Fill Out an Operating Agreement
Once you’ve decided on member roles within your LLC, it is time to create a business contract that holds members to their assigned responsibilities. A Wyoming Operating Agreement form is a legal document that determines the financial and working relationships among business owners, members, and managers.
Familiarize Yourself with the
State’s Taxes and Licenses
Income from pass-through entities, such as a Wyoming Limited Liability Company and Wyoming S corp, “pass through” the business to the owners, who are required to report this information on their personal tax returns. Each individual LLC member will then have to pay taxes on his or her share of the LLC’s income. The LLC itself does not pay federal income taxes, plus Wyoming does not have a state income tax.
Good news for prospective Wyoming LLC owners: not only does having an LLC means that you do not owe state income taxes, but Wyoming also don’t doesn’t have a personal income tax! Even if you choose to have your Wyoming LLC taxed as a corporation, you are still in the clear, as Wyoming does not tax corporate income either. This doesn’t change for a Wyoming S corp.
But there are other various taxes a C corp must pay. For example, if you have employees, you will have to pay an employer tax, and if your business sells goods or services, you will have to pay a sales and use tax. The sales tax in Wyoming is approximately 5.42%, which is fairly low when compared to other states--for example, Tenneesse’s sales tax is 9.47%.
In addition, there may be extra fees for certain insurances, permits, and licenses, depending on the state’s laws and the type of business you own. For example, you may need worker’s compensation, unemployment insurance, building permits, etc. All of the aforementioned can be found in an organized list on the Wyoming Secretary of State website. Find out the LLC in Wyoming requirements in the state you plan to run your business in. Keep in mind that different cities or counties may require certain permits and licenses that other regions do not. Contact your city or county to see if there are any insurances, permits, or licenses you might need to obtain before you begin operating your business.
Familiarize Yourself with the State’s Taxes and Licenses
Income from pass-through entities, such as a Wyoming Limited Liability Company and Wyoming S corp, “pass through” the business to the owners, who are required to report this information on their personal tax returns.
File an Annual Report
Like most states, the State of Wyoming requires all LLC owners to file a report that updates all the information that the Wyoming Secretary of State has on file. This is called the Annual Report and it is submitted every year. Each Annual Report is due by the first day of the registration anniversary month, along with a Wyoming LLC annual fee that varies depending on assets. For example, it is $50 for businesses with less than $250,000 in Wyoming assets. View this worksheet from the WY Secretary of State for more details. There is an additional $2-$9 convenience fee when filing online.
Wyoming LLC filing is available online on the Wyoming Secretary of State website. Filing an Annual Report is necessary for maintaining an active status after starting an LLC in Wyoming. Not filing the report or paying the fee will result in being presented a Wyoming LLC dissolution form, after which the state will dissolve your business.
Annual Reports can be rather complex–requiring the deciphering of gross receipts, dividends, interest, losses, and all Wyoming LLC fees–and you should seek the help of an accountant to ensure that it is filled out properly. Our partner, Bench, will provide you with a team of accountants to help you with your franchise tax reports, as well as general bookkeeping services with monthly financial statements and intuitive software to monitor your business profits and expenses.
File an Annual Report
Like most states, the State of Wyoming requires all LLC owners to file a report that updates all the information that the Wyoming Secretary of State has on file. This is called the Annual Report and it is submitted every year.
Raise Funds for Your LLC
You can’t start a business with zero capital. There are legal fees, the Wyoming LLC filing fee, taxes, employees to pay if you are not an SMLLC, as well as the general Wyoming LLC cost of operating a business. Some of the most commonly-used options for obtaining funding for your LLC are:
- Personal savings and assets
- Informal loans from family and friends
- Peer-to-peer lending sites or crowdfunding
- Conventional bank loan
- Short-term credit card loans
- Government-sponsored grants/loan programs
- Adding LLC owners
Many new LLC owners begin with their savings to fund their new business venture. If your savings are not enough, you may need to look into liquidating your personal assets or use them as collateral for loans. Can you sell your property or refinance your home? Do you have a retirement account such as a Traditional or Roth IRA? Usually, you can withdraw contributions you made to your IRA anytime, tax- and penalty-free, but that is not always the case. Find out what kind of fees your particular retirement plan will hit you with before using your IRA to fund your business.
Next, look into whether you know someone who shares your passion for your business and has the ability to contribute financially to your dream. These personal connections may want to support your startup idea. Although accepting an informal loan from a close friend or relative may feel safe, you should still protect yourself in case your relationship with the friend or family member goes sour. Have an official contract drawn up that all parties agree to. You can choose to have it notarized and have witnesses present for extra protection.
If you prefer not to borrow from friends and family, you can turn to a peer-to-peer (P2P) or social lending website. A P2P site is a place where investors seek out alternative opportunities to invest outside of stocks and bonds. You can apply for a loan and investors can decide whether or not they wish to fund your proposed business through interest-based loans. You can also look into crowdfunding, which is a way for small businesses or startups to raise money online through donations. These options typically require the ability to promote your business well, ensure complete transparency of where the funds go, and sometimes, the possibility of giving up ownership of a piece of your business. Make sure you look into all of the specifics.
You might be hoping to rely on a conventional loan from a bank, credit union or other lending institution for your main source of funds. In this case, you would need a formal business plan to present during your loan application process. If approved, you would be required to sign a legal contract, or a Promissory Note, outlining your obligations to the lender (which would primarily entail regular payments until the loan is paid off). If you are a first-time business owner, it is likely that you may be rejected initially. In that case, you can improve your application and reapply, or look into alternative sources of funding such as short-term financing via credit cards.
Using a credit card as a means of obtaining a fast and easy business loan would grant you use of immediate funds without the hassle and paperwork of loan applications or business plans. This is the best option for a brand new business, and we work with Nav to give our customers access to the credit they need. Visit our financing page and fill out the form for more information.
There are many credit cards that have low or no annual fees, low introductory interest rates, and other rewards depending on your spending. But be careful: make sure you pay back your credit card before the promotional low interest rate expires and skyrockets, or prior to having to pay large annual fees. And don’t make large purchases that can take years to pay back. For example, getting an equipment loan to purchase a piece of equipment is smarter than putting it on a credit card. Credit cards can be a good temporary solution if your business plan will allow you to pay back the debt quickly.
Another option at your disposal is a government-sponsored grant or loan program. Traditional lenders can turn to federal, state, or local governments to finance their business if such a grant or program is available. Typically, these programs consider sponsoring specific type of businesses or certain business owners, so be sure to research what government-sponsored loan your particular business or you might be eligible for.
Lastly, you can invite new members to your team. If you could see your businesses strategy succeeding with a partner or multiple partners, pool together your financial resources with another member to support your startup. An advantage to this funding option is your partner(s) may come with their own social network of business contacts and possibly even their own potential investors. To protect yourself, you can adjust your State of Wyoming LLC Operating Agreement and ensure that you are still the primary owner of the LLC.
Raise Funds for Your LLC
You can’t start a business with zero capital. There are legal fees, the Wyoming LLC filing fee, taxes, employees to pay if you are not an SMLLC, as well as the general Wyoming LLC cost of operating a business.
Create a Business Website
Creating a website for your business is not one of the Wyoming requirements but it is recommended to any business owner operating in the modern world. An online presence is important to have and maintain in order to ensure that your customers trust your company and know they will receive good customer service. Having a website gives your business legitimacy; your customers will visit your website and see that you are a real company with an actual website where they can read about the company’s origin and products/services and access contact information. Being able to read up on a company on their website leads to trust between a consumer and an organization. Also, dependable customer service is often offered through a website. By offering an email address, a contact form, and/or live chat with a representative on your website, you are making it easy for a customer to get connected with someone knowledgeable about the product/service. That allows a customer to know that there is a real person who cares about their satisfaction within the company that they are doing business with.
Start LLC formationIf the website is outdated or there is no website, a consumer may feel that you are not a legitimate business but a scam with no licenses to back up your business’ operations. You can avoid losing customers due to not having a professional website by ensuring that you have one. We work with GoNorth Websites to provide new businesses with high quality, cost-effective websites. Find out more about our custom designed, written, and developed websites, plus optional internet marketing add-ons that help you grow your business.
But websites needs maintenance too. You can’t simply have one created and never update it throughout the years. Policies and terms change, companies grow, products/services improve, and all of that (and more) can be reflected on the website. This keeps your customers up-to-date and offers a personal touch that is valued by any consumer.
In addition, you can look into having a blog or utilizing social media as another means of keeping your customers in-the-know and offering them a way to interact with your company. An online and/or social media presence can also lead to responsive customers who can offer you feedback on how you’re doing—plus, it’ll help get your company’s name out there.
If this all sounds like more than you’d like to deal with on your own, know that you can hire someone to maintain your website and social media presence for you—just like you can hire customer representatives to handle all correspondence. You can employ a web agency to monitor your website and/or a social media marketing agency to manage your social media campaign. A social media campaign is a coordinated marketing plan that can assist you with your business goals, which translates into extra advertising for your new business.Marketing your company can help you have a more profitable business and can aid you with paying back your business loans quicker—something any business owner aims for. Regardless of industry, all businesses should consider having a website as part of the first steps of starting a business.
T The Benefits of Having an Online Presence
If you’ve decided that you want to have a website for your business, keep a few things in mind. When coming up with a website name, make sure that the domain contains your business name and is easy to type and remember for future visits. If you come up with a great web domain that you’d like to use for your business but you don’t plan to create a business website today, you may want to buy the URL to prevent others from acquiring it.
While brainstorming website URLs for your website, you’re going to either realize that you already know what your business is going to be named or that you have no idea what or how to name your business. Here are a few quick Wyoming LLC name tips:
- Follow LLC naming guidelines. Make sure that the name of your business ends with the phrase “Limited Liability Company” or the abbreviation “LLC.” It’s also important not to use any words or phrases that will make it easy for someone to mistake your company for a federal agency; think “State Department.”
- Find a unique name. If you establish an LLC in Wyoming, you will need an original name that is not in use by another LLC. To check if a name has already been taken, you can search the Business Name Availability Database.
- Make sure it is available as a web domain. This way, you can find out if another company outside of Wyoming has a business with the same name. In that case, think of something more original.
Create a Business Website
Creating a website for your business is not one of the Wyoming requirements but it is recommended to any business owner operating in the modern world.
Begin Operating Your Business
After starting an LLC business in Wyoming, make sure to keep your LLC compliant. To do so, keep track of all important dates, such as those for filing annual documents and license/permit renewals, and pay all necessary WY LLC fees. If you’d rather not do these tasks yourself, you can sign up for a service that will automatically send you alerts ahead of crucial state and federal filing deadlines. Likewise, you can hire an accountant, a tax professional, and/or an attorney to ensure you are not making errors when keeping records, filling out paperwork, and making payments.
You can begin operating your business in Wyoming with peace of mind, knowing that you are protected by an LLC in case anything unforeseeable affects your new business venture.
Begin Operating Your Business
After starting an LLC business in Wyoming, make sure to keep your LLC compliant. To do so, keep track of all important dates, such as those for filing annual documents and license/permit renewals, and pay all necessary WY LLC fees.
Wisconsin - LLC
Learn the Benefits of an LLC
There are many benefits to setting up your business as an LLC. LLCs not only have more tax options, but they also offer decreased liability, reduced record keeping, and sharing of profits. They are simpler to set up and maintain, with much simpler rules and regulations. There is decidedly less registration paperwork and lower-costing startup expenses.
But is an LLC the right business structure for you? Some business types come with suggested business structures. For instance, many small business lawyers recommend you create an LLC for an e-commerce business. Why? With e-commerce businesses, products fall under product liability statutes. This means that anyone involved in the sale and distribution of the product could be held liable—even if the problem lies with the manufacturer. An LLC provides you with limited liability in case you are sued by creating a separate and distinct legal entity and isolating business assets from your assets. Therefore, compensation can only be taken from the LLC’s assets, not your personal assets.
If there is an issue with a product, an LLC protects you. Compensation can only be taken from the LLC’s assets, not your personal assets.
Start Your LLC NowBesides protecting you and your assets, creating an LLC provides a business owner with more options for federal tax purposes.
- For instance, if an LLC has only one owner, it’s referred to as a single-member LLC or SMLLC. Owners have the option of being taxed as a Sole Proprietorship, an S Corporation, or a C Corporation.
- If an LLC has more than one owner, it’s categorized as a multiple-member LLC. Owners have the option of being taxed as a Partnership, an S Corporation, or a C Corporation.
An advantage to having a WI LLC with multiple members is that the members decide how to report profits and losses for tax purposes and have several options as to how they prefer to be taxed.
For federal tax purposes, if you’re the sole member of an LLC, your business is treated as a disregarded entity. This means that although you and your business are separate entities, the SMLLC’s income and expenses are reported on the owner’s personal tax return rather than an SMLLC tax return, and the IRS ignores the SMLLC’s status as a business entity. However, for purposes of employment tax and certain excise taxes, an SMLLC is still considered a separate entity. The way a sole proprietorship is taxed is the IRS’ default option for an SMLLC.
In contrast, a WY corp only has two choices: S corporation or C corporation. A business operated as a sole proprietorship or a partnership also doesn’t have an option as to how it will be taxed.
The best part of getting an LLC in Wisconsin is the fact that it combines the liability protection of a C Corporation with the tax treatment of any of the above business entities. Plus, it is easier to set up than a corporation.
But Wisconsin LLCs have a few disadvantages. If LLC owners do not choose to file for a tax status as a corporation, individual members pay high self-employment taxes. Those taxes often are higher than corporate taxes. Also, if business owners decide they may want to take the company public and sell stock, an LLC does not permit this (unless you file as an S corporation). Despite these disadvantages, creating an LLC for your startup business is usually recommended. It is well worth it to protect your personal assets and simplify the process of starting an LLC in Wisconsin.
Learn the Benefits of an LLC
For most folks looking to start a business in Wisconsin, the best type of company to form is what's known as a Limited Liability Company (LLC). An LLC can:
- Run a business
- Hold assets (such as office equipment/real estate)
- Open a bank account
- Enter into contracts
Assign Member Roles
Now it’s the time to decide whether you will run this business on your own or with another member’s or organization’s assistance, how small or large you intend for your team to be, and which duties each member will have.
- Member-managed LLC - Member-managed LLC - These may consist of single or multiple members. Each member plays an active role in the management and operation of the business and has the authority to make decisions to bind the LLC. This is ideal if the business is small, has limited resources, and all members have management skills.
- Manager-managed LLC - These may consist of single or multiple members, but members must relinquish the authority to the manager and cannot interfere with the manager's operational decisions. This is ideal if your business is too large or complex to efficiently allow the sharing of management duties among all members, or if some of your members do not have management skills.
If you know your LLC will have employees, you also know that you will have to pay them. Plus, you will need to figure out the amount you should deduct from their wages for tax purposes. Employees will need to fill out a W-4 Form, and you will need to give them pay stubs with their tax information. Before this all gets overwhelming, keep in mind that we offer Payroll, Tax and HR compliance solutions with our partner, ADP. We make it easy to pay your employees, track time, and file taxes effortlessly. Plus, you and your employees can view and update payroll information via an app--accessible anywhere, anytime, backed by 24/7 live customer service support.
Assign Member Roles
Now it’s the time to decide whether you will run this business on your own or with another member’s or organization’s assistance, how small or large you intend for your team to be, and which duties each member will have.
Decide on a Registered Agent
Next, figure out who the Registered Agent for the LLC should be. The State of Wisconsin requires every LLC in the state to have one. This enables the state to ensure the delivery of legal mail and that court documents can be tracked appropriately. The Registered Agent will also act as the contact point between your LLC and the Wisconsin Secretary of State (SOS) or the Wisconsin Department of Financial Institution (WDFI). Once you assign someone as your Registered Agent, they can receive official correspondence and documents on behalf of your business.
A Registered Agent can be either an individual who is a resident of Wisconsin or a business entity that is authorized to conduct business in the state (but not your own business). This can be you or someone else within your company, but keep in mind that this person will be through whom the state has contact with your business. This agent will receive legal documents (known as “Service of Process”) that pertain to your business. You are legally required to have one.
- Possess a physical street address located in Wisconsin (no P.O. Box address).
- Be available during regular business hours, typically Monday through Friday, 9 am to 5 pm.
Although the most comfortable option for a Registered Agent would be to name yourself, a friend, or a family member, know that this information will be public record. Not only will the information be searchable on the state’s LLC website, it can also be republished on other sites as well. If you work from home and would much rather keep your home address private, this might not be the best choice. An alternative you can look into is hiring Wisconsin Registered Agent Service. We also offer a Registered Agent Service for a small charge that you can include as an add-on to your shopping cart.
Decide on a Registered Agent
Next, figure out who the Registered Agent for the LLC should be. The State of Wisconsin requires every LLC in the state to have one.
Submit Your Articles
of Organization
While forming an LLC in Wisconsin, you will also need to register your Wisconsin Limited Liability Company by submitting a form called the Articles of Organization. Unlike most states, the Articles of Organization are not filed with the Wisconsin Secretary of State (SOS), but rather, the Wisconsin Department of Financial Institution (WDFI). The form includes information such as the LLC's name and address, the Registered Agent’s information, whether the LLC is run by managers or members, etc. If you also have an Operating Agreement written out, you would include a copy of it with the Articles of Organization. Submitting your Articles of Organization is one of Wisconsin’s LLC filing requirements.
If filing on your own, there are usually non-refundable fees that you have to pay with check or money order, additional fees for hand-delivery of forms, and long wait times whether in person or by mail--especially if you’re filing for an LLC during peak season. GovDocFiling can speed up the process for you. We offer an easy online application, expedited pricing, and a free business start-up guide and resources with all filings. You can apply here today.
Once your completed Wisconsin LLC Articles of Organization form is accepted, congratulations! Your company now exists as a recognized legal entity that is authorized to conduct business within the State of Wisconsin.
Submit Your Articles of Organization
While forming an LLC in Wisconsin, you will also need to register your Wisconsin Limited Liability Company by submitting a form called the Articles of Organization.
Obtain an Employer
Identification Number
The next part to setting up an LLC in Wisconsin is getting an EIN. Your LLC will need to file with the IRS for an Employer Identification Number (EIN), which is a nine-digit number assigned to businesses for tax filing and reporting purposes that allows the IRS to identify the taxpayer. (Note: you do not need an SSN to apply for an EIN, so international applicants are welcome.) Corporations, partnerships, and LLCs require an EIN, while sole proprietors do not. Instead, sole proprietors can use their Social Security Number, but that is not recommended as that exposes you to potential identity theft/fraud. In any case, it is a good idea to obtain one in case the company grows or for banking purposes.
Fortunately, you do not have to waste time dealing with the IRS on your own. Going through the IRS directly to get your EIN can be complicated, confusing, and frustrating. GovDocFiling alleviates the angst and aggravation of filing government documents, including applying for an EIN, or Tax ID number. Plus, GovDocFiling has one low price for same-day processing and delivery of your EIN (other Tax ID filing services charge more than $300 for same-day service!). Easily apply for your EIN/Tax ID online here. In addition, if you have any questions about obtaining an EIN, we offer 24/7 email and phone support to help you through the process. Emails are answered quickly at info@govdocfiling.com.
Once you designate how you prefer to be taxed, that decision must remain in effect for five years before being changed without approval from the IRS.
Obtain an Employer Identification Number
The next part to setting up an LLC in Wisconsin is getting an EIN. Your LLC will need to file with the IRS for an Employer Identification Number (EIN), which is a nine-digit number assigned to businesses for tax filing and reporting purposes that allows the IRS to identify the taxpayer.
Fill Out an Operating
Agreement
Once you’ve decided on member roles within your LLC, it is time to create a business contract that holds members to their assigned responsibilities. An LLC Operating Agreement in Wisconsin is a legal document that determines the financial and working relationships among business owners, members, and managers. Member duties would be explained and “what if” scenarios would be covered (such as what happens if a member leaves the LLC). If you do not have an Operating Agreement set up for your business, when something unforeseeable happens, it will be up to the state to decide how to proceed justly, and this may not be what you want.
While it is not a necessary part of a Wisconsin LLC registration to have an Operating Agreement, it is still extremely important to have one in order to protect your business.
You can have a lawyer look over your Wisconsin LLC Operating Agreement form prior to submitting it. Get the legal advice you need to protect you and familiarize yourself with Wisconsin LLC law with our partner, our partner Rocket Lawyer. Your company is responsible for maintaining copies of the Operating Agreement.
Fill Out an Operating Agreement
Once you’ve decided on member roles within your LLC, it is time to create a business contract that holds members to their assigned responsibilities. A Wisconsin Operating Agreement form is a legal document that determines the financial and working relationships among business owners, members, and managers.
Familiarize Yourself with the
State’s Taxes and Licenses
Income from pass-through entities such as limited liability companies (LLCs) and S corporations “pass through” the business to the owners, who are required to report this information on their personal tax returns. Each individual LLC member will then have to pay taxes on his or her share of the LLC’s income. The LLC itself does not pay federal income taxes, but some states do charge the LLC other various taxes.
There are also other various taxes. For example, Wisconsin has a sales and use tax rate of 5%, but additional county taxes may also apply. Paying the sales and use tax requires a permit from the Wisconsin DOR. For more information about this particular permit, you can contact any local Department of Revenue office or call (608) 266-2776.
Like most other states, Wisconsin taxes corporation income, which will apply to you if your LLC is classified as a corporation. In this case, Wisconsin would treat the LLC as a corporation when it comes to taxes. Therefore, if your Wisconsin LLC files taxes as a corporation, the company itself must file a separate tax return. Wisconsin calls their corporation tax a franchise tax. The franchise tax is a flat rate of 7.9% of net income, payable to the state's Department of Revenue (DOR). You can read the Wisconsin Corporate Income and Franchise Taxes document here. While the previous document briefly mentions LLCs, a more specific document breaking down all taxes and credits for LLCs can be found here.
In addition, there may be extra fees for certain insurances, permits, and licenses. For example, you may need worker’s compensation insurance or a building permit, depending on the state’s laws and the type of business you own. Most Wisconsin business licenses can be found on the State of Wisconsin Department of Agriculture, Trade, and Consumer Protection website. Find out the requirements for LLCs in the state you plan to run your business in. Keep in mind that different cities or counties may require certain permits and licenses that other regions do not. Contact your city or county to see if there are any insurances, permits, or licenses you might need to obtain before you begin operating your business.
Familiarize Yourself with the State’s Taxes and Licenses
Income from pass-through entities such as limited liability companies (LLCs) a nd S corporations “pass through” the business to the owners, who are required to report this information on their personal tax returns.
File an Annual Report
Like most states, the State of Wisconsin requires all LLC owners to file an Annual Report. Unlike most states, it is not payable to the Wisconsin Secretary of State (SOS), but instead, the Wisconsin Department of Financial Institution (WDFI). It is due each year by the end of the registration anniversary quarter, along with a fee of $25. You can file online on Wisconsin’s One Stop Business Portal website. Filing this form is necessary for maintaining an active business status. Not filing the report or paying the fee will result in being presented a Virginia corp dissolution form, after which the state will dissolve your business.
The report can be rather complex–requiring the deciphering of gross receipts, dividends, interest, losses etc.–and you should seek the help of an accountant to ensure that it is filled out properly. Our partner, Bench, will provide you with a team of accountants to help you with your franchise tax reports, as well as general bookkeeping services with monthly financial statements and intuitive software to monitor your business profits and expenses.
File an Annual Report
Like most states, the State of Wisconsin requires all LLC owners to file an Annual Report.
Raise Funds for Your LLC
You can’t start a business with zero capital. There are legal fees, document filing fees, taxes, employees to pay if you are not an SMLLC, as well as the costs of operating a business. Some of the most commonly-used options for obtaining funding for your LLC are:
- Personal savings and assets
- Informal loans from family and friends
- Peer-to-peer lending sites or crowdfunding
- Conventional bank loan
- Short-term credit card loans
- Government-sponsored grants/loan programs
- Adding LLC owners
Many new LLC owners begin with their savings to fund their new business venture. If your savings are not enough, you may need to look into liquidating your personal assets or use them as collateral for loans. Can you sell your property or refinance your home? Do you have a retirement account such as a Traditional or Roth IRA? Usually, you can withdraw contributions you made to your IRA anytime, tax- and penalty-free, but that is not always the case. Find out what kind of fees your particular retirement plan will hit you with before using your IRA to fund your business.
Next, look into whether you know someone who shares your passion for your business and has the ability to contribute financially to your dream. These personal connections may want to support your startup idea. Although accepting an informal loan from a close friend or relative may feel safe, you should still protect yourself in case your relationship with the friend or family member goes sour. Have an official contract drawn up that all parties agree to. You can choose to have it notarized and have witnesses present for extra protection.
If you prefer not to borrow from friends and family, you can turn to a peer-to-peer (P2P) or social lending website. A P2P site is a place where investors seek out alternative opportunities to invest outside of stocks and bonds. You can apply for a loan and investors can decide whether or not they wish to fund your proposed business through interest-based loans. You can also look into crowdfunding, which is a way for small businesses or startups to raise money online through donations. These options typically require the ability to promote your business well, ensure complete transparency of where the funds go, and sometimes, the possibility of giving up ownership of a piece of your business. Make sure you look into all of the specifics.
You might be hoping to rely on a conventional loan from a bank, credit union or other lending institution for your main source of funds. In this case, you would need a formal business plan to present during your loan application process. If approved, you would be required to sign a legal contract, or a Promissory Note, outlining your obligations to the lender (which would primarily entail regular payments until the loan is paid off). If you are a first-time business owner, it is likely that you may be rejected initially. In that case, you can improve your application and reapply, or look into alternative sources of funding such as short-term financing via credit cards.
Using a credit card as a means of obtaining a fast and easy business loan would grant you use of immediate funds without the hassle and paperwork of loan applications or business plans. This is the best option for a brand new business, and we work with Nav to give our customers access to the credit they need. Visit our financing page and fill out the form for more information.
There are many credit cards that have low or no annual fees, low introductory interest rates, and other rewards depending on your spending. But be careful: make sure you pay back your credit card before the promotional low interest rate expires and skyrockets, or prior to having to pay large annual fees. And don’t make large purchases that can take years to pay back. For example, getting an equipment loan to purchase a piece of equipment is smarter than putting it on a credit card. Credit cards can be a good temporary solution if your business plan will allow you to pay back the debt quickly.
Another option at your disposal is a government-sponsored grant or loan program. Traditional lenders can turn to federal, state, or local governments to finance their business if such a grant or program is available. Typically, these programs consider sponsoring specific type of businesses or certain business owners, so be sure to research what government-sponsored loan your particular business or you might be eligible for.The Wisconsin Economic Development Corporation (WEDC) offers specific grants for new businesses that may be worth looking into. If none of the grants that are available apply to your business idea, the WEDC also offers business growth programs and many other resources.
Lastly, you can invite new members to your team. If you could see your businesses strategy succeeding with a partner or multiple partners, pool together your financial resources with another member to support your startup. An advantage to this funding option is your partner(s) may come with their own social network of business contacts and possibly even their own potential investors. To protect yourself, you can adjust your Operating Agreement and ensure that you are still the primary owner of the LLC.
Raise Funds for Your LLC
You can’t start a business with zero capital. There are legal fees, document filing fees, taxes, employees to pay if you are not an SMLLC, as well as the costs of operating a business.
Create a Business Website
Creating a website for your business is not a requirement but it is recommended to any business owner operating in the modern world. An online presence is important to have and maintain in order to ensure that your customers trust your company and know they will receive good customer service. Having a website gives your business legitimacy; your customers will visit your website and see that you are a real company with an actual website where they can read about the company’s origin and products/services and access contact information. Being able to read up on a company on their website leads to trust between a consumer and an organization. Also, dependable customer service is often offered through a website. By offering an email address, a contact form, and/or live chat with a representative on your website, you are making it easy for a customer to get connected with someone knowledgeable about the product/service. That allows a customer to know that there is a real person who cares about their satisfaction within the company that they are doing business with.
Start LLC formationIf the website is outdated or there is no website, a consumer may feel that you are not a legitimate business but a scam with no licenses to back up your business’ operations. You can avoid losing customers due to not having a professional website by ensuring that you have one. We work with GoNorth Websites to provide new businesses with high quality, cost-effective websites. Find out more about our custom designed, written, and developed websites, plus optional internet marketing add-ons that help you grow your business.
But websites needs maintenance too. You can’t simply have one created and never update it throughout the years. Policies and terms change, companies grow, products/services improve, and all of that (and more) can be reflected on the website. This keeps your customers up-to-date and offers a personal touch that is valued by any consumer.
In addition, you can look into having a blog or utilizing social media as another means of keeping your customers in-the-know and offering them a way to interact with your company. An online and/or social media presence can also lead to responsive customers who can offer you feedback on how you’re doing—plus, it’ll help get your company’s name out there.
If this all sounds like more than you’d like to deal with on your own, know that you can hire someone to maintain your website and social media presence for you—just like you can hire customer representatives to handle all correspondence. You can employ a web agency to monitor your website and/or a social media marketing agency to manage your social media campaign. A social media campaign is a coordinated marketing plan that can assist you with your business goals, which translates into extra advertising for your new business.Marketing your company can help you have a more profitable business and can aid you with paying back your business loans quicker—something any business owner aims for. Regardless of industry, all businesses should consider having a website as part of the first steps of starting a business.
T The Benefits of Having an Online Presence
If you’ve decided that you want to have a website for your business, keep a few things in mind. When coming up with a website name, make sure that the domain contains your business name and is easy to type and remember for future visits. If you come up with a great web domain that you’d like to use for your business but you don’t plan to create a business website today, you may want to buy the URL to prevent others from acquiring it.
While brainstorming website URLs for your website, you’re going to either realize that you already know what your business is going to be named or that you have no idea what or how to name your business. Here are a few quick Wisconsin LLC name tips:
- Follow LLC naming guidelines. Make sure that the name of your business ends with the phrase “Limited Liability Company” or the abbreviation “LLC.” It’s also important not to use any words or phrases that will make it easy for someone to mistake your company for a federal agency; think “State Department.”
- Find a unique name. If you’re creating an LLC in the State of Wisconsin, you will need an original name that is not in use by another LLC. To check if a name has already been taken, you can search the Wisconsin Name Database.
- Make sure it is available as a web domain. This way, you can find out if another company outside of Wisconsin has a business with the same name. In that case, think of something more original.
Create a Business Website
Creating a website for your business is not a requirement but it is recommended to any business owner operating in the modern world.
Begin Operating Your Business
Once you complete your Wisconsin LLC formation, make sure to keep your LLC compliant. To do so, keep track of all important dates, such as those for filing annual documents and license/permit renewals, and pay all necessary fees. If you’d rather not do these tasks yourself, you can sign up for a service that will automatically send you alerts ahead of crucial state and federal filing deadlines. Likewise, you can hire an accountant, a tax professional, and/or an attorney to ensure you are not making errors when keeping records, filling out paperwork, and making payments.
You can begin operating your business in Wisconsin with peace of mind, knowing that you are protected by an LLC in case anything unforeseeable affects your new business venture.
Begin Operating Your Business
Once you complete your Wisconsin LLC formation, make sure to keep your LLC compliant. To do so, keep track of all important dates, such as those for filing annual documents and license/permit renewals, and pay all necessary fees.
West Virginia - LLC
Learn the Benefits of an LLC
There are many benefits to setting up an LLC in West Virginia. LLCs not only have more tax options, but they also offer decreased liability, reduced record keeping, and sharing of profits. They are simpler to set up and maintain, with much simpler rules and regulations. There is decidedly less registration paperwork and lower-costing startup expenses. The cost to form an LLC in West Virginia is not as high as it is for a West Virginia corp or S corp.
But is an LLC the right business structure for you? Some business types come with suggested business structures. For instance, many small business lawyers recommend you apply for an LLC in West Virginia for an e-commerce business. Why? With e-commerce businesses, products fall under product liability statutes. This means that anyone involved in the sale and distribution of the product could be held liable—even if the problem lies with the manufacturer. An LLC provides you with limited liability in case you are sued by creating a separate and distinct legal entity and isolating business assets from your assets. Therefore, compensation can only be taken from the LLC’s assets, not your personal assets.
If there is an issue with a product, an LLC protects you. Compensation can only be taken from the LLC’s assets, not your personal assets.
Start Your LLC NowBesides protecting you and your assets, creating an LLC provides a business owner with more options for federal tax purposes.
- For instance, if an LLC has only one owner, it’s referred to as a single-member LLC or SMLLC. Owners have the option of being taxed as a Sole Proprietorship, an S Corporation, or a C Corporation.
- If an LLC has more than one owner, it’s categorized as a multiple-member LLC. Owners have the option of being taxed as a Partnership, an S Corporation, or a C Corporation.
An advantage to having a WV LLC with multiple members is that the members decide how to report profits and losses for tax purposes and have several options as to how they prefer to be taxed.
For federal tax purposes, if you’re the sole member of an LLC, your business is treated as a disregarded entity. This means that although you and your business are separate entities, the SMLLC’s income and expenses are reported on the owner’s personal tax return rather than an SMLLC tax return, and the IRS ignores the SMLLC’s status as a business entity. However, for purposes of employment tax and certain excise taxes, an SMLLC is still considered a separate entity. The way a sole proprietorship is taxed is the IRS’ default option for a Single Member LLC in West Virginia State.
In contrast, a corporation only has two choices: S corporation or C corporation. A business operated as a sole proprietorship or a partnership also doesn’t have an option as to how it will be taxed.
For those wanting to open an LLC in West Virginia, the best part is the fact that it combines the liability protection of a C Corporation with the tax treatment of any of the above business entities. Plus, it is easier to set up than a corporation.
But West Virginia LLCs have a few disadvantages. If LLC owners do not choose to file for a tax status as a corporation, individual members pay high self-employment taxes. Also, if business owners decide they may want to take the company public and sell stock, a West Virginia LLC formation does not permit this (unless you file as an S corp in West Virginia). Despite these disadvantages, creating an LLC for your startup business is usually recommended. It is well worth it to protect your personal assets and simplify the process of forming an LLC in West Virginia.
Learn the Benefits of an LLC
For most folks looking to start a business in West Virginia, the best type of company to form is what's known as a Limited Liability Company (LLC). An LLC can:
- Run a business
- Hold assets (such as office equipment/real estate)
- Open a bank account
- Enter into contracts
Assign Member Roles
Now it’s the time to decide whether you will run this business on your own or with another member’s or organization’s assistance, how small or large you intend for your team to be, and which duties each member will have.
- Member-managed LLC - Member-managed LLC - These may consist of single or multiple members. Each member plays an active role in the management and operation of the business and has the authority to make decisions to bind the LLC. This is ideal if the business is small, has limited resources, and all members have management skills.
- Manager-managed LLC - These may consist of single or multiple members, but members must relinquish the authority to the manager and cannot interfere with the manager's operational decisions. This is ideal if your business is too large or complex to efficiently allow the sharing of management duties among all members, or if some of your members do not have management skills.
If you know your LLC will have employees, you also know that you will have to pay them. Plus, you will need to figure out the amount you should deduct from their wages for tax purposes. Employees will need to fill out a W-4 Form, and you will need to give them pay stubs with their tax information. Before this all gets overwhelming, keep in mind that we offer Payroll, Tax and HR compliance solutions with our partner, ADP. We make it easy to pay your employees, track time, and file taxes effortlessly. Plus, you and your employees can view and update payroll information via an app--accessible anywhere, anytime, backed by 24/7 live customer service support.
Assign Member Roles
Now it’s the time to decide whether you will run this business on your own or with another member’s or organization’s assistance, how small or large you intend for your team to be, and which duties each member will have.
Decide on a Registered Agent
Next, figure out who the Registered Agent or Office for the LLC should be. The State of West Virginia Secretary of State requires every LLC in the state to have one. This enables the state to ensure the delivery of legal mail and that court documents can be tracked appropriately. The Registered Agent will also act as the contact point between the West Virginia Secretary of State and LLC. Once you assign someone as your Registered Agent or Office, they can receive official correspondence and documents on behalf of your business.
A Registered Agent can be either an individual who is a resident of West Virginia or a business entity or office that is authorized to conduct business in the state (but not your own business). This can be you or someone else within your company, but keep in mind that this person will be through whom the state has contact with your business. This agent will receive legal documents (known as “Service of Process”) that pertain to your business. You are legally required to have one.
- Possess a physical street address located in West Virginia (no P.O. Box address).
- Be available during regular business hours, typically Monday through Friday, 9 am to 5 pm.
Although the most comfortable option for a Registered Agent would be to name yourself, a friend, or a family member, know that this information will be public record. Not only will the West Virginia LLC information be searchable on the state’s LLC website, it can also be republished on other sites as well. If you work from home and would much rather keep your home address private, this might not be the best choice. An alternative you can look into is hiring a West Virginia Registered Agent LLC Service. We also offer a Registered Agent Service for a small charge that you can include as an add-on to your shopping cart.
Decide on a Registered Agent
Next, figure out who the Registered Agent or Office for the LLC should be. The State of West Virginia Secretary of State requires every LLC in the state to have one.
Submit Your Articles
of Organization
While setting up an LLC in West Virginia, you will need to register an LLC in West Virginia by submitting what is called the Articles of Organization. The form includes information such as the LLC's name and address, the Registered Agent’s information, whether the LLC is run by managers or members, etc. If you also have a West Virginia Limited Liability Operating Agreement form written out, you would include a copy of it with the Articles of Organization in your records. Submitting your Articles of Organization is one of the West Virginia LLC requirements and the Articles of Organization is one of the most important State of West Virginia LLC forms you will need to file.
Please note that, in West Virginia, filing your Articles of Organization alone does not mean you are ready to do business in West Virginia. In addition, you must obtain a business license from the West Virginia Department of Tax and Revenue. This is part of the West Virginia LLC registration process, and more information can be found below in Step 7.
When filing your West Virginia LLC application, there are usually non-refundable fees that you have to pay with check or money order, additional fees for hand-delivery of West Virginia LLC forms, and long wait times whether in person or by mail--especially if you plan to form an LLC in West Virginia online during peak season. GovDocFiling can speed up the process for you. We can help you form a West Virginia LLC online, offer you expedited pricing, and give you a free business start-up guide and resources with all filings. You can apply here today.
Once your completed Articles of Organization West Virginia LLC form is accepted, congratulations! Your company now exists as a recognized legal entity that is authorized to conduct business within the State of West Virginia.
Submit Your Articles of Organization
While setting up an LLC in West Virginia, you will need to register an LLC in West Virginia by submitting what is called the Articles of Organization.
Obtain an Employer
Identification Number
One of the West Virginia LLC filing requirements is getting an EIN. Your LLC will need to file with the IRS for an Employer Identification Number (EIN), which is a nine-digit number assigned to businesses for tax filing and reporting purposes that allows the IRS to identify the taxpayer. (Note: you do not need an SSN to apply for an EIN, so international applicants are welcome.) Corporations, partnerships, and LLCs require an EIN, while sole proprietors do not. Instead, sole proprietors can use their Social Security Number, but that is not recommended as that exposes you to potential identity theft/fraud. In any case, it is a good idea to obtain one in case the company grows or for banking purposes.
Fortunately, you do not have to waste time dealing with the IRS on your own. Going through the IRS directly to get your EIN can be complicated, confusing, and frustrating. GovDocFiling alleviates the angst and aggravation of West Virginia business LLC filing with the government, including applying for an EIN, or Tax ID number. Plus, GovDocFiling has one low price for same-day processing and delivery of your EIN (other Tax ID filing services charge more than $300 for same-day service!). Easily apply for your EIN/Tax ID online here. In addition, if you have any questions about obtaining an EIN, we offer 24/7 email and phone support to help you through the process. Emails are answered quickly at info@govdocfiling.com.
Once you designate how you prefer to be taxed, that decision must remain in effect for five years before being changed without approval from the IRS.
Obtain an Employer Identification Number
One of the West Virginia LLC filing requirements is getting an EIN. Your LLC will need to file with the IRS for an Employer Identification Number (EIN), which is a nine-digit number assigned to businesses for tax filing and reporting purposes that allows the IRS to identify the taxpayer.
Fill Out an Operating
Agreement
Once you’ve decided on member roles within your LLC, it is time to create a business contract that holds members to their assigned responsibilities. A West Virginia Operating Agreement form is a legal document that determines the financial and working relationships among business owners, members, and managers. Member duties would be explained and “what if” scenarios would be covered (such as what happens if a member leaves the LLC). If you do not have an LLC Operating Agreement in West Virginia set up for your business, when something unforeseeable happens, it will be up to the state to decide how to proceed justly, and this may not be what you want.
While it is not a necessary part of a West Virginia LLC registration to have an Operating Agreement, it is still extremely important to have one in order to protect your business.
You can have a lawyer look over your West Virginia LLC Operating Agreement form prior to submitting it. Get the legal advice you need to protect you and familiarize yourself with West Virginia LLC law with our partner, our partner Rocket Lawyer. Your company is responsible for maintaining copies of the Operating Agreement.
Fill Out an Operating Agreement
Once you’ve decided on member roles within your LLC, it is time to create a business contract that holds members to their assigned responsibilities. A West Virginia Operating Agreement form is a legal document that determines the financial and working relationships among business owners, members, and managers.
Familiarize Yourself with the
State’s Taxes and Licenses
Income from pass-through entities, such as a West Virginia Limited Liability Company and West Virginia S-corp, “pass through” the business to the owners, who are required to report this information on their personal tax returns. Each individual LLC member will then have to pay taxes on his or her share of the LLC’s income. The LLC itself does not pay federal income taxes, but some states do charge the LLC other various taxes.
For example, West Virginia has a business registration tax of $30 that all LLCs must pay when they are first formed (prior to conducting business). Payment is due to the State Tax Department. You can register and pay the tax online, after which you will be issued a business registration certificate. Operating a business without a certificate can result in a fine of $100.00 per day for each day that a business operates without properly registering. Additional taxes, such as sales and use tax, excise and fuel tax, business and occupation tax, are also found on the same West Virginia State Tax Department website in the above link.
Like most other states, West Virginia taxes corporation income, which will apply to you if your LLC is classified as a C corporation. In this case, West Virginia would treat the LLC as a corporation when it comes to taxes. Therefore, if your West Virginia LLC files taxes as a corporation, the company itself must file a separate tax return. The corporate income tax in West Virginia is based on the federal taxable income of the corporation at a rate of 6.5%.
In addition, there may be extra fees for certain insurances, permits, and licenses, depending on the state’s laws and the type of business you own. For example, you may need worker’s compensation, unemployment insurance, building permits, etc. Find out the requirements for LLCs in the state you plan to run your business in. Business permits and licenses depending on profession is specified by the West Virginia Division of Labor and can be found here. Keep in mind that different cities or counties may require certain permits and licenses that other regions do not. Contact your city or county to see if there are any insurances, permits, or licenses you might need to obtain before you begin operating your business.
Familiarize Yourself with the State’s Taxes and Licenses
Income from pass-through entities, such as a West Virginia Limited Liability Company and West Virginia S-corp, “pass through” the business to the owners, who are required to report this information on their personal tax returns.
File an Annual Report
Like most states, the State of West Virginia requires all LLC owners to file a report that updates all the information that the West Virginia Secretary of State has on file. This is called the Annual Report and it is submitted every year. Each Annual Report is due by July 1, along with a fee of $25 payable to the West Virginia Secretary of State. There is a $50 late fee.
West Virginia LLC filing is available online on the West Virginia Secretary of State website. Filing an Annual Report is necessary for maintaining an active status after starting an LLC in WV. Not filing the report or paying the fee will result in being presented a West Virginia LLC dissolution form, after which the state will dissolve your business.
Annual Reports can be rather complex–requiring the deciphering of gross receipts, dividends, interest, losses, and all West Virginia LLC fees–and you should seek the help of an accountant to ensure that it is filled out properly. Our partner, Bench, will provide you with a team of accountants to help you with your franchise tax reports, as well as general bookkeeping services with monthly financial statements and intuitive software to monitor your business profits and expenses.
File an Annual Report
Like most states, the State of West Virginia requires all LLC owners to file a report that updates all the information that the West Virginia Secretary of State has on file.
Raise Funds for Your LLC
You can’t start a business with zero capital. There are legal fees, the West Virginia LLC filing fee, taxes, employees to pay if you are not an SMLLC, as well as the general West Virginia LLC cost. Some of the most commonly-used options for obtaining funding for your LLC are:
- Personal savings and assets
- Informal loans from family and friends
- Peer-to-peer lending sites or crowdfunding
- Conventional bank loan
- Short-term credit card loans
- Government-sponsored grants/loan programs
- Adding LLC owners
Many new LLC owners begin with their savings to fund their new business venture. If your savings are not enough, you may need to look into liquidating your personal assets or use them as collateral for loans. Can you sell your property or refinance your home? Do you have a retirement account such as a Traditional or Roth IRA? Usually, you can withdraw contributions you made to your IRA anytime, tax- and penalty-free, but that is not always the case. Find out what kind of fees your particular retirement plan will hit you with before using your IRA to fund your business.
Next, look into whether you know someone who shares your passion for your business and has the ability to contribute financially to your dream. These personal connections may want to support your startup idea. Although accepting an informal loan from a close friend or relative may feel safe, you should still protect yourself in case your relationship with the friend or family member goes sour. Have an official contract drawn up that all parties agree to. You can choose to have it notarized and have witnesses present for extra protection.
If you prefer not to borrow from friends and family, you can turn to a peer-to-peer (P2P) or social lending website. A P2P site is a place where investors seek out alternative opportunities to invest outside of stocks and bonds. You can apply for a loan and investors can decide whether or not they wish to fund your proposed business through interest-based loans. You can also look into crowdfunding, which is a way for small businesses or startups to raise money online through donations. These options typically require the ability to promote your business well, ensure complete transparency of where the funds go, and sometimes, the possibility of giving up ownership of a piece of your business. Make sure you look into all of the specifics.
You might be hoping to rely on a conventional loan from a bank, credit union or other lending institution for your main source of funds. In this case, you would need a formal business plan to present during your loan application process. If approved, you would be required to sign a legal contract, or a Promissory Note, outlining your obligations to the lender (which would primarily entail regular payments until the loan is paid off). If you are a first-time business owner, it is likely that you may be rejected initially. In that case, you can improve your application and reapply, or look into alternative sources of funding such as short-term financing via credit cards.
Using a credit card as a means of obtaining a fast and easy business loan would grant you use of immediate funds without the hassle and paperwork of loan applications or business plans. This is the best option for a brand new business, and we work with Nav to give our customers access to the credit they need. Visit our financing page and fill out the form for more information.
There are many credit cards that have low or no annual fees, low introductory interest rates, and other rewards depending on your spending. But be careful: make sure you pay back your credit card before the promotional low interest rate expires and skyrockets, or prior to having to pay large annual fees. And don’t make large purchases that can take years to pay back. For example, getting an equipment loan to purchase a piece of equipment is smarter than putting it on a credit card. Credit cards can be a good temporary solution if your business plan will allow you to pay back the debt quickly.
Another option at your disposal is a government-sponsored grant or loan program. Traditional lenders can turn to federal, state, or local governments to finance their business if such a grant or program is available. Typically, these programs consider sponsoring specific type of businesses or certain business owners, so be sure to research what government-sponsored loan your particular business or you might be eligible for.
Lastly, you can invite new members to your team. If you could see your businesses strategy succeeding with a partner or multiple partners, pool together your financial resources with another member to support your startup. An advantage to this funding option is your partner(s) may come with their own social network of business contacts and possibly even their own potential investors. To protect yourself, you can adjust your State of West Virginia LLC Operating Agreement and ensure that you are still the primary owner of the LLC.
Raise Funds for Your LLC
You can’t start a business with zero capital. There are legal fees, the West Virginia LLC filing fee, taxes, employees to pay if you are not an SMLLC, as well as the general West Virginia LLC cost.
Create a Business Website
Creating a website for your business is not a requirement but it is recommended to any business owner operating in the modern world. An online presence is important to have and maintain in order to ensure that your customers trust your company and know they will receive good customer service. Having a website gives your business legitimacy; your customers will visit your website and see that you are a real company with an actual website where they can read about the company’s origin and products/services and access contact information. Being able to read up on a company on their website leads to trust between a consumer and an organization. Also, dependable customer service is often offered through a website. By offering an email address, a contact form, and/or live chat with a representative on your website, you are making it easy for a customer to get connected with someone knowledgeable about the product/service. That allows a customer to know that there is a real person who cares about their satisfaction within the company that they are doing business with.
Start LLC formationIf the website is outdated or there is no website, a consumer may feel that you are not a legitimate business but a scam with no licenses to back up your business’ operations. You can avoid losing customers due to not having a professional website by ensuring that you have one. We work with GoNorth Websites to provide new businesses with high quality, cost-effective websites. Find out more about our custom designed, written, and developed websites, plus optional internet marketing add-ons that help you grow your business.
But websites needs maintenance too. You can’t simply have one created and never update it throughout the years. Policies and terms change, companies grow, products/services improve, and all of that (and more) can be reflected on the website. This keeps your customers up-to-date and offers a personal touch that is valued by any consumer.
In addition, you can look into having a blog or utilizing social media as another means of keeping your customers in-the-know and offering them a way to interact with your company. An online and/or social media presence can also lead to responsive customers who can offer you feedback on how you’re doing—plus, it’ll help get your company’s name out there.
If this all sounds like more than you’d like to deal with on your own, know that you can hire someone to maintain your website and social media presence for you—just like you can hire customer representatives to handle all correspondence. You can employ a web agency to monitor your website and/or a social media marketing agency to manage your social media campaign. A social media campaign is a coordinated marketing plan that can assist you with your business goals, which translates into extra advertising for your new business.Marketing your company can help you have a more profitable business and can aid you with paying back your business loans quicker—something any business owner aims for. Regardless of industry, all businesses should consider having a website as part of the first steps of starting a business.
T The Benefits of Having an Online Presence
If you’ve decided that you want to have a website for your business, keep a few things in mind. When coming up with a website name, make sure that the domain contains your business name and is easy to type and remember for future visits. If you come up with a great web domain that you’d like to use for your business but you don’t plan to create a business website today, you may want to buy the URL to prevent others from acquiring it.
While brainstorming website URLs for your website, you’re going to either realize that you already know what your business is going to be named or that you have no idea what or how to name your business. Here are a few quick West Virginia LLC name tips:
- Follow LLC naming guidelines. Make sure that the name of your business ends with the phrase “Limited Liability Company” or the abbreviation “LLC.” It’s also important not to use any words or phrases that will make it easy for someone to mistake your company for a federal agency; think “State Department.”
- Find a unique name. If you’re getting an LLC in West Virginia you will need an original name that is not in use by another LLC. To check if a name has already been taken, you can search the Business Name Availability Database.
- Make sure it is available as a web domain. This way, you can find out if another company outside of West Virginia has a business with the same name. In that case, think of something more original.
Create a Business Website
Creating a website for your business is not a requirement but it is recommended to any business owner operating in the modern world.
Begin Operating Your Business
After starting an LLC business in West Virginia, make sure to keep your LLC compliant. To do so, keep track of all important dates, such as those for filing annual documents and license/permit renewals, and pay all necessary WV LLC fees. If you’d rather not do these tasks yourself, you can sign up for a service that will automatically send you alerts ahead of crucial state and federal filing deadlines. Likewise, you can hire an accountant, a tax professional, and/or an attorney to ensure you are not making errors when keeping records, filling out paperwork, and making payments.
You can begin operating your business in West Virginia with peace of mind, knowing that you are protected by an LLC in case anything unforeseeable affects your new business venture.
Begin Operating Your Business
After starting an LLC business in West Virginia, make sure to keep your LLC compliant. To do so, keep track of all important dates, such as those for filing annual documents and license/permit renewals, and pay all necessary WV LLC fees.
Washington - LLC
Learn the Benefits of an LLC
There are many benefits to setting up your business as a Washington LLC. LLCs not only have more tax options, but they also offer decreased liability, reduced record keeping, and sharing of profits. They are simpler to set up and maintain, with much simpler rules and regulations. There is decidedly less registration paperwork and lower-costing startup expenses.
But is an LLC the right business structure for you? Some business types come with suggested business structures. For instance, many small business lawyers recommend you create an LLC for an e-commerce business. Why? With e-commerce businesses, products fall under product liability statutes. This means that anyone involved in the sale and distribution of the product could be held liable—even if the problem lies with the manufacturer. An LLC provides you with limited liability in case you are sued by creating a separate and distinct legal entity and isolating business assets from your assets. Therefore, compensation can only be taken from the LLC’s assets, not your personal assets.
If there is an issue with a product, an LLC protects you. Compensation can only be taken from the LLC’s assets, not your personal assets.
Start Your LLC NowBesides protecting you and your assets, creating an LLC provides a business owner with more options for federal tax purposes.
- For instance, if an LLC has only one owner, it’s referred to as a single-member LLC or SMLLC. Owners have the option of being taxed as a Sole Proprietorship, an S Corporation, or a C Corporation.
- If an LLC has more than one owner, it’s categorized as a multiple-member LLC. Owners have the option of being taxed as a Partnership, an S Corporation, or a C Corporation.
An advantage to having a WA LLC with multiple members is that the members decide how to report profits and losses for tax purposes and have several options as to how they prefer to be taxed.
For federal tax purposes, if you’re the sole member of an LLC, your business is treated as a disregarded entity. This means that although you and your business are separate entities, the SMLLC’s income and expenses are reported on the owner’s personal tax return rather than an SMLLC tax return, and the IRS ignores the SMLLC’s status as a business entity. However, for purposes of employment tax and certain excise taxes, an SMLLC is still considered a separate entity. The way a sole proprietorship is taxed is the IRS’ default option for an SMLLC.
In contrast, a corporation only has two choices: S corporation or C corporation. A business operated as a sole proprietorship or a partnership also doesn’t have an option as to how it will be taxed.
The best part of opening an LLC in Washington is the fact that it combines the liability protection of a C Corporation with the tax treatment of any of the above business entities. Plus, it is easier to set up than a corporation.
But Washington LLCs have a few disadvantages. If LLC owners do not choose to file for a tax status as a corporation, individual members pay high self-employment taxes. Also, if business owners decide they may want to take the company public and sell stock, a Washington LLC does not permit this (unless you file as a Washington S corporation). Despite these disadvantages, creating an LLC for your startup business is usually recommended. It is well worth it to protect your personal assets and simplify the process of starting an LLC in Washington.
Learn the Benefits of an LLC
For most folks looking to start a business in Washington, the best type of company to form is what's known as a Limited Liability Company (LLC). An LLC can:
- Run a business
- Hold assets (such as office equipment/real estate)
- Open a bank account
- Enter into contracts
Assign Member Roles
Now it’s the time to decide whether you will run this business on your own or with another member’s or organization’s assistance, how small or large you intend for your team to be, and which duties each member will have.
- Member-managed LLC - These may consist of single or multiple members. Each member plays an active role in the management and operation of the business and has the authority to make decisions to bind the LLC. This is ideal if the business is small, has limited resources, and all members have management skills.
- Manager-managed LLC - These may consist of single or multiple members, but members must relinquish the authority to the manager and cannot interfere with the manager's operational decisions. This is ideal if your business is too large or complex to efficiently allow the sharing of management duties among all members, or if some of your members do not have management skills.
If you know your LLC will have employees, you also know that you will have to pay them. Plus, you will need to figure out the amount you should deduct from their wages for tax purposes. Employees will need to fill out a W-4 Form, and you will need to give them pay stubs with their tax information. Before this all gets overwhelming, keep in mind that we offer Payroll, Tax and HR compliance solutions with our partner, ADP. We make it easy to pay your employees, track time, and file taxes effortlessly. Plus, you and your employees can view and update payroll information via an app--accessible anywhere, anytime, backed by 24/7 live customer service support.
Assign Member Roles
Now it’s the time to decide whether you will run this business on your own or with another member’s or organization’s assistance, how small or large you intend for your team to be, and which duties each member will have.
Decide on a Registered Agent
Next, figure out who the Registered Agent for the LLC should be. The State of Washington requires every LLC in the state to have one. This enables the state to ensure the delivery of legal mail and that court documents can be tracked appropriately. The Registered Agent will also act as the contact point between your LLC and the Washington Secretary of State (SOS). Once you assign someone as your Registered Agent, they can receive official correspondence and documents on behalf of your business.
A Registered Agent can be either an individual who is a resident of Washington or a business entity that is authorized to conduct business in the state (but not your own business). This can be you or someone else within your company, but keep in mind that this person will be through whom the state has contact with your business. This agent will receive legal documents (known as “Service of Process”) that pertain to your business. You are legally required to have one.
- Possess a physical street address located in Washington (no P.O. Box address).
- Be available during regular business hours, typically Monday through Friday, 9 am to 5 pm.
Although the most comfortable option for a Registered Agent would be to name yourself, a friend, or a family member, know that this information will be public record. Not only will the information be searchable on the state’s LLC website, it can also be republished on other sites as well. If you work from home and would much rather keep your home address private, this might not be the best choice. An alternative you can look into is hiring a Washington Registered Agent LLC Service. We also offer a Registered Agent Service for a small charge that you can include as an add-on to your shopping cart.
Decide on a Registered Agent
Next, figure out who the Registered Agent for the LLC should be. The State of Washington requires every LLC in the state to have one.
Submit Your Articles
of Organization
While forming an LLC in Washington, you will also need to register your Washington Limited Liability Company by submitting a form called the Articles of Organization. The Articles of Organization are filed with the Washington Secretary of State Business Services Division. The form includes information such as the LLC's name and address, the Registered Agent’s information, whether the LLC is run by managers or members, etc. If you also have an Operating Agreement written out, you would include a copy of it with the Articles of Organization. Submitting your Articles of Organization is one of Washington’s LLC filing requirements.
If filing on your own, there are usually non-refundable fees that you have to pay with check or money order, additional fees for hand-delivery of forms, and long wait times whether in person or by mail--especially if you’re filing for an LLC during peak season. GovDocFiling can speed up the process for you. We offer an easy online application, expedited pricing, and a free business start-up guide and resources with all filings. You can apply here today.
Once your completed Washington LLC Articles of Organization form is accepted, congratulations! Your company now exists as a recognized legal entity that is authorized to conduct business within the State of Washington.
Submit Your Articles of Organization
While forming an LLC in Washington, you will also need to register your Washington Limited Liability Company by submitting a form called the Articles of Organization.
Obtain an Employer
Identification Number
The next part to setting up an LLC in Washington is getting an EIN. Your LLC will need to file with the IRS for an Employer Identification Number (EIN), which is a nine-digit number assigned to businesses for tax filing and reporting purposes that allows the IRS to identify the taxpayer. (Note: you do not need an SSN to apply for an EIN, so international applicants are welcome.) Corporations, partnerships, and LLCs require an EIN, while sole proprietors do not. Instead, sole proprietors can use their Social Security Number, but that is not recommended as that exposes you to potential identity theft/fraud. In any case, it is a good idea to obtain one in case the company grows or for banking purposes.
Fortunately, you do not have to waste time dealing with the IRS on your own. Going through the IRS directly to get your EIN can be complicated, confusing, and frustrating. GovDocFiling alleviates the angst and aggravation of filing government documents, including applying for an EIN, or Tax ID number. Plus, GovDocFiling has one low price for same-day processing and delivery of your EIN (other Tax ID filing services charge more than $300 for same-day service!). Easily apply for your EIN/Tax ID online here. In addition, if you have any questions about obtaining an EIN, we offer 24/7 email and phone support to help you through the process. Emails are answered quickly at info@govdocfiling.com.
Once you designate how you prefer to be taxed, that decision must remain in effect for five years before being changed without approval from the IRS.
Obtain an Employer Identification Number
The next part to setting up an LLC in Washington is getting an EIN. Your LLC will need to file with the IRS for an Employer Identification Number (EIN), which is a nine-digit number assigned to businesses for tax filing and reporting purposes that allows the IRS to identify the taxpayer.
Fill Out an Operating
Agreement
Once you’ve decided on member roles within your LLC, it is time to create a business contract that holds members to their assigned responsibilities. An LLC Operating Agreement in Washington is a legal document that determines the financial and working relationships among business owners, members, and managers. Member duties would be explained and “what if” scenarios would be covered (such as what happens if a member leaves the LLC). If you do not have an Operating Agreement set up for your business, when something unforeseeable happens, it will be up to the state to decide how to proceed justly, and this may not be what you want.
While it is not one of the Washington LLC requirements to have an Operating Agreement, it is still extremely important to have one in order to protect your business.
You can have a lawyer look over your Washington Operating Agreement form prior to submitting it. Get the legal advice you need to protect yourself with our partner Rocket Lawyer.Your company is responsible for maintaining copies of the Operating Agreement.
Fill Out an Operating Agreement
Once you’ve decided on member roles within your LLC, it is time to create a business contract that holds members to their assigned responsibilities.
Familiarize Yourself with the
State’s Taxes and Licenses
Income from pass-through entities such as Washington Limited Liability Companies (LLCs) and Washington S corps “pass through” the business to the owners, who are required to report this information on their personal tax returns. Typically, each individual LLC member will then have to pay taxes on his or her share of the LLC’s income. The LLC itself does not pay federal income taxes, but some states do charge the LLC other various taxes.
Good news for prospective LLC owners in Washington. The State of WA does not have a corporation or personal income tax. Instead, Washington State has a Business and Occupation Tax (B & O Tax) if there are sales of goods or services. The B & O Tax is a type of gross income tax of 1.8% on revenue after your first $35,000 of gross receipts. Instead of using your EIN, this particular tax is tracked by your Washington State Unified Business Identifier Number, or UBI. A UBI number (also sometimes called a tax registration number, business registration number, or a business license number) is a 9-digit number that registers you across several state agencies and permits you to do business in Washington State. You can register for a UBI when you fill out all of your Washington LLC formation forms. Additional information on B & O Tax can be found on the Department of Revenue (DOR) of Washington State website
There are other taxes a business owner must pay in Washington State, such as the retail sales and use tax, or personal property tax. Keep in mind that cities and counties can add on their own sales tax, so look into taxes specific to your location within the state. There is also a use tax, which is always the same as the sales tax in your local area. More info on taxes and rates can be found on the DOR website.
In addition, there may be extra fees for certain insurances, permits, and licenses, depending on the state’s laws and the type of business you own. For example, you may need worker’s compensation, unemployment insurance, building permits, etc. Washington permits and licenses listed by specialty can be found here. Find out the requirements for LLCs in the state you plan to run your business in. Keep in mind that different cities or counties may require certain permits and licenses that other regions do not. Contact your city or county to see if there are any insurances, permits, or licenses you might need to obtain before you begin operating your business.
Familiarize Yourself with the State’s Taxes and Licenses
Income from pass-through entities such as Washington Limited Liability Companies (LLCs) and Washington S corps “pass through” the business to the owners, who are required to report this information on their personal tax returns.
File an Annual Report
Like most states, the State of Washington requires all LLC owners to file an Annual Report. The initial report is due within 120 days of your Washington LLC’s formation. All subsequent annual reports are due on August 31, along with a fee of $60 payable to the State of Washington Business Licensing Service. It is another $50 to expedite the service. You can file online on the Washington SOS LLC website. You can use the same website to print a paper form to mail or to take in person to the Washington State Department of Revenue office. Filing this form is necessary for maintaining an active business status.
The report can be rather complex–requiring the deciphering of gross receipts, dividends, interest, losses etc.–and you should seek the help of an accountant to ensure that it is filled out properly. Our partner, Bench, will provide you with a team of accountants to help you with your franchise tax reports, as well as general bookkeeping services with monthly financial statements and intuitive software to monitor your business profits and expenses.
File an Annual Report
Like most states, the State of Washington requires all LLC owners to file an Annual Report. The initial report is due within 120 days of your Washington LLC’s formation.
Raise Funds for Your LLC
You can’t start a business with zero capital. There are legal fees, document filing fees, taxes, employees to pay if you are not an SMLLC, as well as the Washington LLC costs of operating a business. Some of the most commonly-used options for obtaining funding for your LLC are:
- Personal savings and assets
- Informal loans from family and friends
- Peer-to-peer lending sites or crowdfunding
- Conventional bank loan
- Short-term credit card loans
- Government-sponsored grants/loan programs
- Adding LLC owners
Many new LLC owners begin with their savings to fund their new business venture. If your savings are not enough, you may need to look into liquidating your personal assets or use them as collateral for loans. Can you sell your property or refinance your home? Do you have a retirement account such as a Traditional or Roth IRA? Usually, you can withdraw contributions you made to your IRA anytime, tax- and penalty-free, but that is not always the case. Find out what kind of fees your particular retirement plan will hit you with before using your IRA to fund your business.
Next, look into whether you know someone who shares your passion for your business and has the ability to contribute financially to your dream. These personal connections may want to support your startup idea. Although accepting an informal loan from a close friend or relative may feel safe, you should still protect yourself in case your relationship with the friend or family member goes sour. Have an official contract drawn up that all parties agree to. You can choose to have it notarized and have witnesses present for extra protection.
If you prefer not to borrow from friends and family, you can turn to a peer-to-peer (P2P) or social lending website. A P2P site is a place where investors seek out alternative opportunities to invest outside of stocks and bonds. You can apply for a loan and investors can decide whether or not they wish to fund your proposed business through interest-based loans. You can also look into crowdfunding, which is a way for small businesses or startups to raise money online through donations. These options typically require the ability to promote your business well, ensure complete transparency of where the funds go, and sometimes, the possibility of giving up ownership of a piece of your business. Make sure you look into all of the specifics.
You might be hoping to rely on a conventional loan from a bank, credit union or other lending institution for your main source of funds. In this case, you would need a formal business plan to present during your loan application process. If approved, you would be required to sign a legal contract, or a Promissory Note, outlining your obligations to the lender (which would primarily entail regular payments until the loan is paid off). If you are a first-time business owner, it is likely that you may be rejected initially. In that case, you can improve your application and reapply, or look into alternative sources of funding such as short-term financing via credit cards.
Using a credit card as a means of obtaining a fast and easy business loan would grant you use of immediate funds without the hassle and paperwork of loan applications or business plans. This is the best option for a brand new business, and we work with Nav to give our customers access to the credit they need. Visit our financing page and fill out the form for more information.
There are many credit cards that have low or no annual fees, low introductory interest rates, and other rewards depending on your spending. But be careful: make sure you pay back your credit card before the promotional low interest rate expires and skyrockets, or prior to having to pay large annual fees. And don’t make large purchases that can take years to pay back. For example, getting an equipment loan to purchase a piece of equipment is smarter than putting it on a credit card. Credit cards can be a good temporary solution if your business plan will allow you to pay back the debt quickly.
Another option at your disposal is a government-sponsored grant or loan program. Traditional lenders can turn to federal, state, or local governments to finance their business if such a grant or program is available. Typically, these programs consider sponsoring specific type of businesses or certain business owners, so be sure to research what government-sponsored loan your particular business or you might be eligible for.
Lastly, you can invite new members to your team. If you could see your businesses strategy succeeding with a partner or multiple partners, pool together your financial resources with another member to support your startup. An advantage to this funding option is your partner(s) may come with their own social network of business contacts and possibly even their own potential investors. To protect yourself, you can adjust your Operating Agreement and ensure that you are still the primary owner of the LLC.
Raise Funds for Your LLC
You can’t start a business with zero capital. There are legal fees, document filing fees, taxes, employees to pay if you are not an SMLLC, as well as the Washington LLC costs of operating a business.
Create a Business Website
Creating a website for your business is not a requirement but it is recommended to any business owner operating in the modern world. An online presence is important to have and maintain in order to ensure that your customers trust your company and know they will receive good customer service. Having a website gives your business legitimacy; your customers will visit your website and see that you are a real company with an actual website where they can read about the company’s origin and products/services and access contact information. Being able to read up on a company on their website leads to trust between a consumer and an organization. Also, dependable customer service is often offered through a website. By offering an email address, a contact form, and/or live chat with a representative on your website, you are making it easy for a customer to get connected with someone knowledgeable about the product/service. That allows a customer to know that there is a real person who cares about their satisfaction within the company that they are doing business with.
Start LLC formationIf the website is outdated or there is no website, a consumer may feel that you are not a legitimate business but a scam with no licenses to back up your business’ operations. You can avoid losing customers due to not having a professional website by ensuring that you have one. We work with GoNorth Websites to provide new businesses with high quality, cost-effective websites. Find out more about our custom designed, written, and developed websites, plus optional internet marketing add-ons that help you grow your business.
But websites needs maintenance too. You can’t simply have one created and never update it throughout the years. Policies and terms change, companies grow, products/services improve, and all of that (and more) can be reflected on the website. This keeps your customers up-to-date and offers a personal touch that is valued by any consumer.
In addition, you can look into having a blog or utilizing social media as another means of keeping your customers in-the-know and offering them a way to interact with your company. An online and/or social media presence can also lead to responsive customers who can offer you feedback on how you’re doing—plus, it’ll help get your company’s name out there.
If this all sounds like more than you’d like to deal with on your own, know that you can hire someone to maintain your website and social media presence for you—just like you can hire customer representatives to handle all correspondence. You can employ a web agency to monitor your website and/or a social media marketing agency to manage your social media campaign. A social media campaign is a coordinated marketing plan that can assist you with your business goals, which translates into extra advertising for your new business.Marketing your company can help you have a more profitable business and can aid you with paying back your business loans quicker—something any business owner aims for. Regardless of industry, all businesses should consider having a website as part of the first steps of starting a business.
T The Benefits of Having an Online Presence
If you’ve decided that you want to have a website for your business, keep a few things in mind. When coming up with a website name, make sure that the domain contains your business name and is easy to type and remember for future visits. If you come up with a great web domain that you’d like to use for your business but you don’t plan to create a business website today, you may want to buy the URL to prevent others from acquiring it.
While brainstorming website URLs for your website, you’re going to either realize that you already know what your business is going to be named or that you have no idea what or how to name your business. Here are a few quick Washington LLC name tips:
- Follow LLC naming guidelines. Make sure that the name of your business ends with the phrase “Limited Liability Company” or the abbreviation “LLC.” It’s also important not to use any words or phrases that will make it easy for someone to mistake your company for a federal agency; think “State Department.”
- Find a unique name. If you’re creating an LLC in Washington State, you will need an original name that is not in use by another LLC. To check if a name has already been taken, you can search the Washington Name Database.
- Make sure it is available as a web domain. This way, you can find out if another company outside of Washington has a business with the same name. In that case, think of something more original.
Create a Business Website
Creating a website for your business is not a requirement but it is recommended to any business owner operating in the modern world.
Begin Operating Your Business
Once you complete your Washington LLC formation, make sure to keep your LLC compliant. To do so, keep track of all important dates, such as those for filing annual documents and license/permit renewals, and pay all necessary fees. If you’d rather not do these tasks yourself, you can sign up for a service that will automatically send you alerts ahead of crucial state and federal filing deadlines. Likewise, you can hire an accountant, a tax professional, and/or an attorney to ensure you are not making errors when keeping records, filling out paperwork, and making payments.
You can begin operating your business in Washington with peace of mind, knowing that you are protected by an LLC in case anything unforeseeable affects your new business venture.
Begin Operating Your Business
Once you complete your Washington LLC formation, make sure to keep your LLC compliant. To do so, keep track of all important dates, such as those for filing annual documents and license/permit renewals, and pay all necessary fees.
Virginia - LLC
Learn Why Creating an LLC is a Good Decision
There are many benefits to setting up an LLC in Virginia. LLCs not only have more tax options, but they also offer decreased liability, reduced record keeping, and sharing of profits. They are simpler to set up and maintain, with much simpler rules and regulations. There is decidedly less registration paperwork and lower-costing startup expenses. The cost to set up an LLC in Virginia is not as high as it is for a Virginia State corp or Virginia S corporation.
But is an LLC the right business structure for you? Some business types come with suggested business structures. For instance, many small business lawyers recommend you create an LLC in VA for an e-commerce business. Why? With e-commerce businesses, products fall under product liability statutes. This means that anyone involved in the sale and distribution of the product could be held liable—even if the problem lies with the manufacturer. An LLC provides you with limited liability in case you are sued by creating a separate and distinct legal entity and isolating business assets from your assets. Therefore, compensation can only be taken from the LLC’s assets, not your personal assets.
If there is an issue with a product, an LLC protects you. Compensation can only be taken from the LLC’s assets, not your personal assets.
Start Your LLC NowBesides protecting you and your assets, creating an LLC provides a business owner with more options for federal tax purposes.
- For instance, if an LLC has only one owner, it’s referred to as a single-member LLC or SMLLC. Owners have the option of being taxed as a Sole Proprietorship, an S Corporation, or a C Corporation.
- If an LLC has more than one owner, it’s categorized as a multiple-member LLC. Owners have the option of being taxed as a Partnership, an S Corporation, or a C Corporation.
An advantage to having a VA LLC with multiple members is that the members decide how to report profits and losses for tax purposes and have several options as to how they prefer to be taxed.
For federal tax purposes, if you’re the sole member of an LLC, your business is treated as a disregarded entity. This means that although you and your business are separate entities, the SMLLC’s income and expenses are reported on the owner’s personal tax return rather than an SMLLC tax return, and the IRS ignores the SMLLC’s status as a business entity. However, for purposes of employment tax and certain excise taxes, an SMLLC is still considered a separate entity. The way a sole proprietorship is taxed is the IRS’ default option for a Single Member LLC in Virginia.
In contrast, a corporation only has two choices: S corporation or C corporation. A business operated as a sole proprietorship or a partnership also doesn’t have an option as to how it will be taxed.
For those wanting to open an LLC in VA, the best part is the fact that it combines the liability protection of a Virginia corp with the tax treatment of any of the above business entities. Plus, it is easier to set up than a corporation.
But Virginia LLCs have a few disadvantages. If LLC owners do not choose to file for a tax status as a corporation, individual members pay high self-employment taxes. Also, if business owners decide they may want to take the company public and sell stock, a Virginia LLC formation does not permit this (unless you file as an S corp in Virginia). Despite these disadvantages, creating an LLC for your startup business is usually recommended. It is well worth it to protect your personal assets and simplify the process of establishing an LLC in Virginia.
Learn Why Creating an LLC is a Good Decision
Forming a Limited Liability Company (LLC) is the most versatile and flexible way to start your business in Virginia. Creating an LLC offers personal asset protection, pass-through taxation, less paperwork, and low maintenance. That’s what makes LLCs a popular business entity type for entrepreneurs in Virginia.
Assign Member Roles
Now it’s the time to decide whether you will run this business on your own or with another member’s or organization’s assistance, how small or large you intend for your team to be, and which duties each member will have.
- Member-managed LLC - These may consist of single or multiple members. Each member plays an active role in the management and operation of the business and has the authority to make decisions to bind the LLC. This is ideal if the business is small, has limited resources, and all members have management skills.
- Manager-managed LLC - These may consist of single or multiple members, but members must relinquish the authority to the manager and cannot interfere with the manager's operational decisions. This is ideal if your business is too large or complex to efficiently allow the sharing of management duties among all members, or if some of your members do not have management skills.
If you know your LLC will have employees, you also know that you will have to pay them. Plus, you will need to figure out the amount you should deduct from their wages for tax purposes. Employees will need to fill out a W-4 Form, and you will need to give them pay stubs with their tax information. Before this all gets overwhelming, keep in mind that we offer Payroll, Tax and HR compliance solutions with our partner, ADP. We make it easy to pay your employees, track time, and file taxes effortlessly. Plus, you and your employees can view and update payroll information via an app--accessible anywhere, anytime, backed by 24/7 live customer service support.
Assign Member Roles
Decide whether you will run the business on your own or with other members. You will have to define the roles and responsibilities of each LLC member.
At the same time, you need to choose a management structure for your Virginia LLC. You can either run a member-managed LLC (all members will play active roles in decision-making) or run a manager-managed LLC (only an appointed manager will make authoritative decisions).
Decide on a Registered Agent
Next, figure out who the Registered Agent for the LLC should be. The State of Virginia requires every LLC in the state to have one. This enables the state to ensure the delivery of legal mail and that court documents can be tracked appropriately. The Registered Agent will also act as the contact point between the Virginia Office of the Clerk and the LLC. Once you assign someone as your Registered Agent, they can receive official correspondence and documents on behalf of your business.
A Registered Agent can be either an individual who is a resident of Virginia or a business entity that is authorized to conduct business in the state (but not your own business). This can be you or someone else within your company, but keep in mind that this person will be through whom the state has contact with your business. This agent will receive legal documents (known as “Service of Process”) that pertain to your business. You are legally required to have one.
- Possess a physical street address located in Virginia (no P.O. Box address).
- Be available during regular business hours, typically Monday through Friday, 9 am to 5 pm.
Although the most comfortable option for a Registered Agent would be to name yourself, a friend, or a family member, know that this information will be public record. Not only will the information be searchable on the state’s LLC website, it can also be republished on other sites as well. If you work from home and would much rather keep your home address private, this might not be the best choice. An alternative you can look into is hiring a Virginia Registered Agent LLC Service. We also offer a Registered Agent Service for a small charge that you can include as an add-on to your shopping cart.
Figure Out Who’ll Be the Registered Agent for Your LLC
The State of Virginia requires that all LLCs have a Registered Agent to ensure the delivery of legal mail and court documents related to your business. They must have a physical street address in Virginia and should be available during regular business hours.
Submit Your Articles
of Organization
While starting an LLC in Virginia, you will need to register an LLC in VA by submitting what is called the Articles of Organization. The Articles of Organization are filed with the Office of the Clerk for LLC registration in Virginia. The form includes information such as the LLC's name and address, the Registered Agent’s information, whether the LLC is run by managers or members, etc. If you also have a Virginia LLC Operating Agreement form written out, you would include a copy of it with the Articles of Organization in your records. Submitting your Articles of Organization is one of the Virginia LLC filing requirements and the Articles of Organization is one of the most important State of Virginia LLC forms you will need to file. It is a type of Virginia LLC registration form.
When you file an LLC in Virginia, there are usually non-refundable fees that you have to pay with check or money order, additional fees for hand-delivery of Virginia LLC forms, and long wait times whether in person or by mail--especially if you’re filing for an LLC in Virginia online during peak season. GovDocFiling can speed up the process for you. We can help you form a Virginia LLC online, offer you expedited pricing, and give you a free business start-up guide and resources with all filings. You can apply here today.
Once your completed Virginia LLC Articles of Organization form is accepted, congratulations! Your company now exists as a recognized legal entity that is authorized to conduct business within the State of Virginia.
Submit Your Articles of Organization
You need to register an LLC in Virginia by submitting the Articles of Organization with details like your LLC’s name, address, the Registered Agent’s information, and your LLC’s management structure.
Once your completed Virginia LLC Articles of Organization form is accepted, your company will become a recognized legal entity that is authorized to conduct business within the state of Virginia.
Obtain an Employer
Identification Number
One of the Virginia LLC tax filing requirements is getting an EIN. Your LLC will need to file with the IRS for an Employer Identification Number (EIN), which is a nine-digit number assigned to businesses for tax filing and reporting purposes that allows the IRS to identify the taxpayer. (Note: you do not need an SSN to apply for an EIN, so international applicants are welcome.) Corporations, partnerships, and LLCs require an EIN, while sole proprietors do not. Instead, sole proprietors can use their Social Security Number, but that is not recommended as that exposes you to potential identity theft/fraud. In any case, it is a good idea to obtain one in case the company grows or for banking purposes.
Fortunately, you do not have to waste time dealing with the IRS on your own. Going through the IRS directly to get your EIN can be complicated, confusing, and frustrating. GovDocFiling alleviates the angst and aggravation of Virginia business filing with the government, including applying for an EIN, or Tax ID number. Plus, GovDocFiling has one low price for same-day processing and delivery of your EIN (other Tax ID filing services charge more than $300 for same-day service!). Easily apply for your EIN/Tax ID online here. In addition, if you have any questions about obtaining an EIN, we offer 24/7 email and phone support to help you through the process. Emails are answered quickly at info@govdocfiling.com.
Once you designate how you prefer to be taxed, that decision must remain in effect for five years before being changed without approval from the IRS.
Get Your Employer Identification Number (EIN)
File with the IRS to get an EIN for your LLC. An EIN is a nine-digit number assigned to businesses for tax filing and reporting. It allows the IRS to identify the taxpayer.
You don’t have to deal with the IRS on your own as GovDocFiling offers same-day processing and delivery of your EIN at a low price.
Fill Out an Operating
Agreement
Once you’ve decided on member roles within your LLC, it is time to create a business contract that holds members to their assigned responsibilities. An LLC Operating Agreement is a legal document that determines the financial and working relationships among business owners, members, and managers. Member duties would be explained and “what if” scenarios would be covered (such as what happens if a member leaves the LLC). If you do not have an Operating Agreementset up for your business, when something unforeseeable happens, it will be up to the state to decide how to proceed justly, and this may not be what you want.
While it is not a necessary part of a Virginia LLC registration to have an Operating Agreement, it is still extremely important to have one in order to protect your business.
You can have a lawyer look over your Virginia Operating Agreement form prior to submitting it. Get the legal advice you need to protect you and familiarize yourself with Virginia LLC law with our partner, our partner Rocket Lawyer. Your company is responsible for maintaining copies of the Operating Agreement.
Create an LLC Operating Agreement in Virginia
An LLC Operating Agreement is an essential business contract that governs the financial and working relationships among LLC members and defines the roles and responsibilities of each member.
Familiarize Yourself with the
State’s Taxes and Licenses
Income from pass-through entities, such as a Virginia Limited Liability Company and Virginia State corp, “pass through” the business to the owners, who are required to report this information on their personal tax returns. Each individual LLC member will then have to pay taxes on his or her share of the LLC’s income. The LLC itself does not pay federal income taxes, but some states do charge the LLC other various taxes. Visit the Virginia tax government website to learn more about how taxes work for Limited Liability Companies in Virginia.
Like most other states, Virginia taxes corporation income, which will apply to you if your LLC is classified as a C corporation. In this case, Virginia would treat the LLC as a corporation when it comes to taxes. Therefore, if your Virginia LLC files taxes as a corporation, the company itself must file a separate tax return. The State of Virginia has a corporate tax of a flat 6% of net income.
In addition, there may be extra fees for certain insurances, permits, and licenses, depending on the state’s laws and the type of business you own. Depending on your type of business, you may need worker’s compensation, unemployment insurance, building permits, etc. Keep in mind that different cities or counties may require certain permits and licenses that other regions do not. For example, if you are opening a business in the city of Virginia Beach, the Virginia Beach Planning Department has a Permits and Inspections page with a list of most common permits. The Commissioner of Revenue issues all business licenses. Talking to the Commissioner of Revenue at the Business License Division is a good idea to learn more about specific licenses for each city: 757-385-4515, 8am-5pm, Monday through Friday. Contact your city or county to see if there are any insurances, permits, or licenses you might need to obtain before you begin operating your business.
Understand How Virginia Taxes & Licenses Work
The state of Virginia doesn’t ask LLCs to pay the Federal income tax. The income from an LLC in Virginia passes through the business to the owners and members. Each LLC member needs to pay taxes on their share of the LLC’s income.
File an Annual Report
Like most states, the State of Virginia requires all LLC owners to file a report that updates all the information that the Office of the Clerk has on file. This is called the Annual Report and it is submitted every year. Each year, the Commission prepares the corporation’s Annual Report, using information on its records from the last Annual Report. The Annual Report is sent to the Virginia LLC Registered Agent, who is responsible for forwarding it to the corporation members. Each Annual Report is due annually by the last day of the anniversary month the business was registered, along with a fee of $50 payable to the Office of the Clerk in Virginia.
Virginia LLC filing is available online or via paper; instructions for both can be found on the Virginia Office of the Clerk website. Filing an Annual Report is necessary for maintaining an active status after starting an LLC in Virginia. Not filing the report or paying the fee will result in being presented a Virginia LLC dissolution form, after which the state will dissolve your business.
Annual Reports can be rather complex–requiring the deciphering of gross receipts, dividends, interest, losses, and all Virginia LLC fees–and you should seek the help of an accountant to ensure that it is filled out properly. Our partner, Bench, will provide you with a team of accountants to help you with your franchise tax reports, as well as general bookkeeping services with monthly financial statements and intuitive software to monitor your business profits and expenses.
File Your LLC’s Annual Report
The state of Virginia requires all LLC owners to file the Annual Report every year by the last day of the anniversary month of business registration. You need to pay a fee of $50 along with the Annual Report to the Office of the Clerk in Virginia.
Raise Funds for Your LLC
You can’t start a business with zero capital. There are legal fees, the Virginia LLC filing fee, taxes, employees to pay if you are not an SMLLC, as well as the general Virginia LLC cost of operating a business. Some of the most commonly-used options for obtaining funding for your LLC are:
- Personal savings and assets
- Informal loans from family and friends
- Peer-to-peer lending sites or crowdfunding
- Conventional bank loan
- Short-term credit card loans
- Government-sponsored grants/loan programs
- Adding LLC owners
Many new LLC owners begin with their savings to fund their new business venture. If your savings are not enough, you may need to look into liquidating your personal assets or use them as collateral for loans. Can you sell your property or refinance your home? Do you have a retirement account such as a Traditional or Roth IRA? Usually, you can withdraw contributions you made to your IRA anytime, tax- and penalty-free, but that is not always the case. Find out what kind of fees your particular retirement plan will hit you with before using your IRA to fund your business.
Next, look into whether you know someone who shares your passion for your business and has the ability to contribute financially to your dream. These personal connections may want to support your startup idea. Although accepting an informal loan from a close friend or relative may feel safe, you should still protect yourself in case your relationship with the friend or family member goes sour. Have an official contract drawn up that all parties agree to. You can choose to have it notarized and have witnesses present for extra protection.
If you prefer not to borrow from friends and family, you can turn to a peer-to-peer (P2P) or social lending website. A P2P site is a place where investors seek out alternative opportunities to invest outside of stocks and bonds. You can apply for a loan and investors can decide whether or not they wish to fund your proposed business through interest-based loans. You can also look into crowdfunding, which is a way for small businesses or startups to raise money online through donations. These options typically require the ability to promote your business well, ensure complete transparency of where the funds go, and sometimes, the possibility of giving up ownership of a piece of your business. Make sure you look into all of the specifics.
You might be hoping to rely on a conventional loan from a bank, credit union or other lending institution for your main source of funds. In this case, you would need a formal business plan to present during your loan application process. If approved, you would be required to sign a legal contract, or a Promissory Note, outlining your obligations to the lender (which would primarily entail regular payments until the loan is paid off). If you are a first-time business owner, it is likely that you may be rejected initially. In that case, you can improve your application and reapply, or look into alternative sources of funding such as short-term financing via credit cards.
Using a credit card as a means of obtaining a fast and easy business loan would grant you use of immediate funds without the hassle and paperwork of loan applications or business plans. This is the best option for a brand new business, and we work with Nav to give our customers access to the credit they need. Visit our financing page and fill out the form for more information.
There are many credit cards that have low or no annual fees, low introductory interest rates, and other rewards depending on your spending. But be careful: make sure you pay back your credit card before the promotional low interest rate expires and skyrockets, or prior to having to pay large annual fees. And don’t make large purchases that can take years to pay back. For example, getting an equipment loan to purchase a piece of equipment is smarter than putting it on a credit card. Credit cards can be a good temporary solution if your business plan will allow you to pay back the debt quickly.
Another option at your disposal is a government-sponsored grant or loan program. Traditional lenders can turn to federal, state, or local governments to finance their business if such a grant or program is available. Typically, these programs consider sponsoring specific type of businesses or certain business owners, so be sure to research what government-sponsored loan your particular business or you might be eligible for.
Lastly, you can invite new members to your team. If you could see your businesses strategy succeeding with a partner or multiple partners, pool together your financial resources with another member to support your startup. An advantage to this funding option is your partner(s) may come with their own social network of business contacts and possibly even their own potential investors. To protect yourself, you can adjust your Operating Agreement and ensure that you are still the primary owner of the LLC.
Raise Funds to Set Up & Operate Your Virginia LLC
You can’t start a business with zero capital. You need to raise funds to manage legal fees, the Virginia LLC filing fee, taxes, employee salary, and other operational costs of your LLC.
Create a Business Website
The next step in getting an LLC in Virginia has to do with a business website. Creating a website for your business is not a requirement but it is recommended to any business owner operating in the modern world. An online presence is important to have and maintain in order to ensure that your customers trust your company and know they will receive good customer service. Having a website gives your business legitimacy; your customers will visit your website and see that you are a real company with an actual website where they can read about the company’s origin and products/services and access contact information. Being able to read up on a company on their website leads to trust between a consumer and an organization. Also, dependable customer service is often offered through a website. By offering an email address, a contact form, and/or live chat with a representative on your website, you are making it easy for a customer to get connected with someone knowledgeable about the product/service. That allows a customer to know that there is a real person who cares about their satisfaction within the company that they are doing business with.
Start LLC formationIf the website is outdated or there is no website, a consumer may feel that you are not a legitimate business but a scam with no licenses to back up your business’ operations. You can avoid losing customers due to not having a professional website by ensuring that you have one. We work with GoNorth Websites to provide new businesses with high quality, cost-effective websites. Find out more about our custom designed, written, and developed websites, plus optional internet marketing add-ons that help you grow your business.
But websites needs maintenance too. You can’t simply have one created and never update it throughout the years. Policies and terms change, companies grow, products/services improve, and all of that (and more) can be reflected on the website. This keeps your customers up-to-date and offers a personal touch that is valued by any consumer.
In addition, you can look into having a blog or utilizing social media as another means of keeping your customers in-the-know and offering them a way to interact with your company. An online and/or social media presence can also lead to responsive customers who can offer you feedback on how you’re doing—plus, it’ll help get your company’s name out there.
If this all sounds like more than you’d like to deal with on your own, know that you can hire someone to maintain your website and social media presence for you—just like you can hire customer representatives to handle all correspondence. You can employ a web agency to monitor your website and/or a social media marketing agency to manage your social media campaign. A social media campaign is a coordinated marketing plan that can assist you with your business goals, which translates into extra advertising for your new business.Marketing your company can help you have a more profitable business and can aid you with paying back your business loans quicker—something any business owner aims for. Regardless of industry, all businesses should consider having a website as part of the first steps of starting a business.
T The Benefits of Having an Online Presence
If you’ve decided that you want to have a website for your business, keep a few things in mind. When coming up with a website name, make sure that the domain contains your business name and is easy to type and remember for future visits. If you come up with a great web domain that you’d like to use for your business but you don’t plan to create a business website today, you may want to buy the URL to prevent others from acquiring it.
While brainstorming website URLs for your website, you’re going to either realize that you already know what your business is going to be named or that you have no idea what or how to name your business. Here are a few quick Virginia LLC name tips:
- Follow LLC naming guidelines. Make sure that the name of your business ends with the phrase “Limited Liability Company” or the abbreviation “LLC.” It’s also important not to use any words or phrases that will make it easy for someone to mistake your company for a federal agency; think “State Department.”
- Find a unique name. If you’re getting an LLC in Virginia you will need an original name that is not in use by another LLC. To check if a name has already been taken, you can search the Virginia Business Name Search Database
- Make sure it is available as a web domain. This way, you can find out if another company outside of Virginia has a business with the same name. In that case, think of something more original.
Build a Professional Business Website for Your Virginia LLC
Creating a business website is not legally required but it is still essential to operate a business in the modern world. Building a website for your LLC in Virginia can help you attract, engage, and acquire new customers and enhance your online visibility.
Begin Operating Your Business
Once you complete your Virginia LLC formation, make sure to keep your LLC compliant. To do so, keep track of all important dates, such as those for filing annual documents and license/permit renewals, and pay all necessary Virginia LLC fees. If you’d rather not do these tasks yourself, you can sign up for a service that will automatically send you alerts ahead of crucial state and federal filing deadlines. Likewise, you can hire an accountant, a tax professional, and/or an attorney to ensure you are not making errors when keeping records, filling out paperwork, and making payments.
You can begin operating your business in Virginia with peace of mind, knowing that you are protected by an LLC in case anything unforeseeable affects your new business venture.
Start Operating Your LLC in Virginia
Once you’ve completed your Virginia LLC formation, you can begin operating your business within the state. You should keep track of all important dates such as those for filing annual documents and license/permit renewals. Make sure that you pay your Virginia LLC fees in time.
You can also hire an accountant for record-keeping, paperwork, and timely payments.
Our LLC Formation Packages - The Fastest & Easiest Way to Start Your LLC in Virginia
Trust us, creating an LLC in Virginia has never been easier.
Get started within five minutes by filling out a simple form to start your LLC in Virginia. This simple, online form covers all of the information needed for both Virginia LLC formation and the Federal EIN/Tax ID filing. We offer additional value to you by including five essential legal documents in our LLC formation packages for free.
We’re entrepreneurs – just like you. We make the process of forming a business entity in Virginia easy, quick, and hassle-free for those who are just starting out.
We also offer a step-by-step Business Start Up Guide to walk you through the process of legally starting a business. Let us help you get started regardless of whether you are a freelancer, consultant, startup, small business, or anyone who wants to form an LLC in Virginia.
Launch your business in Virginia successfully with GovDocFiling.
Apply in 5 minutes. Expedited processing. No additional cost.
Why is GovDocFiling a Good Choice for Forming Your LLC in Virginia?
GovDocFiling is a small business that values entrepreneurship and believes in promoting it. Our business start up and LLC formation packages include everything you need to form an LLC in Virginia.
Here’s what makes us stand out from the other LLC registration solutions out there:
- Expedited filing time for Federal and state filing with no additional rush fees.
- Simplified LLC application process for easy and hassle-free LLC registration and Federal EIN/Tax ID filing.
- Five legal documents essential for operating your business seamlessly in Virginia.
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Our LLC filing and formation packages include:
- Filing for State Articles of Organization, Federal EIN/Tax ID from the IRS
- Single & Multi-Member LLC Operating Agreement
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- Mutual Non-Disclosure Agreement
- Unilateral Non-Disclosure Agreement
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- Employee Agreement
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Vermont - LLC
Learn the Benefits of an LLC
There are many benefits to setting up an LLC in Vermont. LLCs not only have more tax options, but they also offer decreased liability, reduced record keeping, and sharing of profits. They are simpler to set up and maintain, with much simpler rules and regulations. There is decidedly less registration paperwork and lower-costing startup expenses. The cost to form an LLC in Vermont is not as high as it is for a Vermont corp or S corp.
But is an LLC the right business structure for you? Some business types come with suggested business structures. For instance, many small business lawyers recommend you apply for an LLC in Vermont for an e-commerce business. Why? With e-commerce businesses, products fall under product liability statutes. This means that anyone involved in the sale and distribution of the product could be held liable—even if the problem lies with the manufacturer. An LLC provides you with limited liability in case you are sued by creating a separate and distinct legal entity and isolating business assets from your assets. Therefore, compensation can only be taken from the LLC’s assets, not your personal assets.
If there is an issue with a product, an LLC protects you. Compensation can only be taken from the LLC’s assets, not your personal assets.
Start Your LLC NowBesides protecting you and your assets, creating an LLC provides a business owner with more options for federal tax purposes.
- For instance, if an LLC has only one owner, it’s referred to as a single-member LLC or SMLLC. Owners have the option of being taxed as a Sole Proprietorship, an S Corporation, or a C Corporation.
- If an LLC has more than one owner, it’s categorized as a multiple-member LLC. Owners have the option of being taxed as a Partnership, an S Corporation, or a C Corporation.
An advantage to having a VT LLC with multiple members is that the members decide how to report profits and losses for tax purposes and have several options as to how they prefer to be taxed.
For federal tax purposes, if you’re the sole member of an LLC, your business is treated as a disregarded entity. This means that although you and your business are separate entities, the SMLLC’s income and expenses are reported on the owner’s personal tax return rather than an SMLLC tax return, and the IRS ignores the SMLLC’s status as a business entity. However, for purposes of employment tax and certain excise taxes, an SMLLC is still considered a separate entity. The way a sole proprietorship is taxed is the IRS’ default option for a Vermont Single Member LLC.
In contrast, a VT corp only has two choices: S corporation or C corporation. A business operated as a sole proprietorship or a partnership also doesn’t have an option as to how it will be taxed.
For those wanting to open an LLC in Vermont, the best part is the fact that it combines the liability protection of a C Corporation with the tax treatment of any of the above business entities. Plus, it is easier to set up than a corporation.
But Vermont LLCs have a few disadvantages. If LLC owners do not choose to file for a tax status as a corporation, individual members pay high self-employment taxes. Also, if business owners decide they may want to take the company public and sell stock, a Vermont LLC formation does not permit this (unless you file as an S corp in Vermont). Despite these disadvantages, creating an LLC for your startup business is usually recommended. It is well worth it to protect your personal assets and simplify the process of forming an LLC in Vermont.
Learn the Benefits of an LLC
For most folks looking to start a business in Vermont, the best type of company to form is what's known as a Limited Liability Company (LLC). An LLC can:
- Run a business
- Hold assets (such as office equipment/real estate)
- Open a bank account
- Enter into contracts
Assign Member Roles
Now it’s the time to decide whether you will run this business on your own or with another member’s or organization’s assistance, how small or large you intend for your team to be, and which duties each member will have.
- Member-managed LLC - These may consist of single or multiple members. Each member plays an active role in the management and operation of the business and has the authority to make decisions to bind the LLC. This is ideal if the business is small, has limited resources, and all members have management skills.
- Manager-managed LLC - These may consist of single or multiple members, but members must relinquish the authority to the manager and cannot interfere with the manager's operational decisions. This is ideal if your business is too large or complex to efficiently allow the sharing of management duties among all members, or if some of your members do not have management skills.
If you know your LLC will have employees, you also know that you will have to pay them. Plus, you will need to figure out the amount you should deduct from their wages for tax purposes. Employees will need to fill out a W-4 Form, and you will need to give them pay stubs with their tax information. Before this all gets overwhelming, keep in mind that we offer Payroll, Tax and HR compliance solutions with our partner, ADP. We make it easy to pay your employees, track time, and file taxes effortlessly. Plus, you and your employees can view and update payroll information via an app--accessible anywhere, anytime, backed by 24/7 live customer service support.
Assign Member Roles
Now it’s the time to decide whether you will run this business on your own or with another member’s or organization’s assistance, how small or large you intend for your team to be, and which duties each member will have.
Decide on a Registered Agent
Next, figure out who the Registered Agent for the LLC should be. The State of Vermont requires every LLC in the state to have one. This enables the state to ensure the delivery of legal mail and that court documents can be tracked appropriately. The Registered Agent will also act as the contact point between the Vermont Secretary of State and the LLC. Once you assign someone as your Registered Agent, they can receive official correspondence and documents on behalf of your business.
A Registered Agent can be either an individual who is a resident of Vermont or a business entity that is authorized to conduct business in the state (but not your own business). This can be you or someone else within your company, but keep in mind that this person will be through whom the state has contact with your business. This agent will receive legal documents (known as “Service of Process”) that pertain to your business. You are legally required to have one.
- Possess a physical street address located in Vermont (no P.O. Box address).
- Be available during regular business hours, typically Monday through Friday, 9 am to 5 pm.
Although the most comfortable option for a Registered Agent would be to name yourself, a friend, or a family member, know that this information will be public record. Not only will the information be searchable on the state’s LLC website, it can also be republished on other sites as well. If you work from home and would much rather keep your home address private, this might not be the best choice. An alternative you can look into is hiring Vermont Registered Agent Services for the LLC. We also offer a Registered Agent Service for a small charge that you can include as an add-on to your shopping cart. That way, you can ensure that you have the most-dependable and best Vermont Registered Agent for your LLC.
Decide on a Registered Agent
Next, figure out who the Registered Agent for the LLC should be. The State of Vermont requires every LLC in the state to have one.
Submit Your Articles
of Organization
While setting up an LLC in Vermont, you will need to register an LLC in Vermont by submitting what is called the Articles of Organization. The form includes information such as the LLC's name and address, the Registered Agent’s information, whether the LLC is run by managers or members, etc. If you also have a Vermont Limited Liability Operating Agreement form written out, you would include a copy of it with the Articles of Organization in your records. Submitting your Articles of Organization is one of the Vermont LLC requirements and the Articles of Organization is one of the most important State of Vermont LLC forms you will need to file.
When filing your Vermont LLC application, there are usually non-refundable fees that you have to pay with check or money order, additional fees for hand-delivery of Vermont LLC forms, and long wait times whether in person or by mail--especially if you plan to form an LLC in Vermont online during peak season. GovDocFiling can speed up the process for you. We can help you form a Vermont LLC online, offer you expedited pricing, and give you a free business start-up guide and resources with all filings. You can apply here today.
Once your completed Articles of Organization Vermont LLC form is accepted, congratulations! Your company now exists as a recognized legal entity that is authorized to conduct business within the State of Vermont.
Submit Your Articles of Organization
While setting up an LLC in Vermont, you will need to register an LLC in Vermont by submitting what is called the Articles of Organization.
Obtain an Employer
Identification Number
One of the Vermont LLC filing requirements is getting an EIN. Your LLC will need to file with the IRS for an Employer Identification Number (EIN), which is a nine-digit number assigned to businesses for tax filing and reporting purposes that allows the IRS to identify the taxpayer. (Note: you do not need an SSN to apply for an EIN, so international applicants are welcome.) Corporations, partnerships, and LLCs require an EIN, while sole proprietors do not. Instead, sole proprietors can use their Social Security Number, but that is not recommended as that exposes you to potential identity theft/fraud. In any case, it is a good idea to obtain one in case the company grows or for banking purposes.
Fortunately, you do not have to waste time dealing with the IRS on your own. Going through the IRS directly to get your EIN can be complicated, confusing, and frustrating. GovDocFiling alleviates the angst and aggravation of Vermont business LLC filing with the government, including applying for an EIN, or Tax ID number. Plus, GovDocFiling has one low price for same-day processing and delivery of your EIN (other Tax ID filing services charge more than $300 for same-day service!). Easily apply for your EIN/Tax ID online here. In addition, if you have any questions about obtaining an EIN, we offer 24/7 email and phone support to help you through the process. Emails are answered quickly at info@govdocfiling.com.
Once you designate how you prefer to be taxed, that decision must remain in effect for five years before being changed without approval from the IRS.
Obtain an Employer Identification Number
One of the Vermont LLC filing requirements is getting an EIN. Your LLC will need to file with the IRS for an Employer Identification Number (EIN), which is a nine-digit number assigned to businesses for tax filing and reporting purposes that allows the IRS to identify the taxpayer.
Fill Out an Operating
Agreement
Once you’ve decided on member roles within your LLC, it is time to create a business contract that holds members to their assigned responsibilities. A Vermont Operating Agreement orm is a legal document that determines the financial and working relationships among business owners, members, and managers. Member duties would be explained and “what if” scenarios would be covered (such as what happens if a member leaves the LLC). If you do not have an LLC Operating Agreement in Vermont set up for your business, when something unforeseeable happens, it will be up to the state to decide how to proceed justly, and this may not be what you want.
While it is not one of the Vermont LLC requirements to have an Operating Agreement, it is still extremely important to have one in order to protect your business.
You can have a lawyer look over your Vermont LLC Operating Agreement form prior to submitting it. Get the legal advice you need to protect you and familiarize yourself with Vermont LLC law with our partner Rocket Lawyer.Your company is responsible for maintaining copies of the Operating Agreement.
Fill Out an Operating Agreement
Once you’ve decided on member roles within your LLC, it is time to create a business contract that holds members to their assigned responsibilities.
Familiarize Yourself with the
State’s Taxes and Licenses
Income from pass-through entities, such as a Vermont Limited Liability Company and Vermont S-corp, “pass through” the business to the owners, who are required to report this information on their personal tax returns. Each individual LLC member will then have to pay taxes on his or her share of the LLC’s income. The LLC itself does not pay federal income taxes, but Vermont’s personal income tax rates range from 3.55% to 9.4%. There is also a business entity income tax that applies to Vermont S-corporations, Partnerships, and Limited Liability Companies if they elect to be taxed as partnerships or S-Corporations. More information can be found here.
There are other various taxes that the business will have to pay. For example, if you have employees, you will have to pay an employer tax, and if your business sells goods or services, you will have to pay a sales and use tax. View additional Vermont taxes on the Department of Taxes website.
Like most other states, Vermont taxes corporation income, which will apply to you if your LLC is classified as a C corporation. In this case, Vermont would treat the LLC as a corporation when it comes to taxes. Therefore, if your Vermont LLC files taxes as a corporation, the company itself must file a separate tax return in order to pay the corporate income tax. Vermont taxes corporate income at 8.50%, which is one of the highest corporate income tax rates in the country.
In addition, there may be extra fees for certain insurances, permits, and licenses, depending on the state’s laws and the type of business you own. For example, you may need worker’s compensation, unemployment insurance, building permits, etc. Licenses for certain professions can be found either on the Vermont Government website or the Vermont Secretary of State website. Find out the requirements for LLCs in the state you plan to run your business in. Keep in mind that different cities or counties may require certain permits and licenses that other regions do not. Contact your city or county to see if there are any insurances, permits, or licenses you might need to obtain before you begin operating your business.
Familiarize Yourself with the State’s Taxes and Licenses
Income from pass-through entities, such as a Vermont Limited Liability Company and Vermont S-corp, “pass through” the business to the owners, who are required to report this information on their personal tax returns.
File an Annual Report
Like most states, the State of Vermont requires all LLC owners to file a report that updates all the information that the Vermont Secretary of State has on file. This is called the Annual Report and it is submitted every year. Each Annual Report is due annually within three months after the end of your fiscal year (usually March 31), along with a Vermont LLC annual fee of $35.
Vermont LLC filing is available online on the Vermont Secretary of State website. Filing an Annual Report is necessary for maintaining an active status after starting an LLC in Vermont. Not filing the report or paying the fee will result in being presented a Vermont LLC dissolution form, after which the state will dissolve your business.
Annual Reports can be rather complex–requiring the deciphering of gross receipts, dividends, interest, losses, and all Vermont LLC fees–and you should seek the help of an accountant to ensure that it is filled out properly. Our partner, Bench, will provide you with a team of accountants to help you with your franchise tax reports, as well as general bookkeeping services with monthly financial statements and intuitive software to monitor your business profits and expenses.
File an Annual Report
Like most states, the State of Vermont requires all LLC owners to file a report that updates all the information that the Vermont Secretary of State has on file.
Raise Funds for Your LLC
You can’t start a business with zero capital. There are legal fees, the Vermont LLC filing fee, taxes, employees to pay if you are not an SMLLC, as well as the general Vermont LLC cost. Some of the most commonly-used options for obtaining funding for your LLC are:
- Personal savings and assets
- Informal loans from family and friends
- Peer-to-peer lending sites or crowdfunding
- Conventional bank loan
- Short-term credit card loans
- Government-sponsored grants/loan programs
- Adding LLC owners
Many new LLC owners begin with their savings to fund their new business venture. If your savings are not enough, you may need to look into liquidating your personal assets or use them as collateral for loans. Can you sell your property or refinance your home? Do you have a retirement account such as a Traditional or Roth IRA? Usually, you can withdraw contributions you made to your IRA anytime, tax- and penalty-free, but that is not always the case. Find out what kind of fees your particular retirement plan will hit you with before using your IRA to fund your business.
Next, look into whether you know someone who shares your passion for your business and has the ability to contribute financially to your dream. These personal connections may want to support your startup idea. Although accepting an informal loan from a close friend or relative may feel safe, you should still protect yourself in case your relationship with the friend or family member goes sour. Have an official contract drawn up that all parties agree to. You can choose to have it notarized and have witnesses present for extra protection.
If you prefer not to borrow from friends and family, you can turn to a peer-to-peer (P2P) or social lending website. A P2P site is a place where investors seek out alternative opportunities to invest outside of stocks and bonds. You can apply for a loan and investors can decide whether or not they wish to fund your proposed business through interest-based loans. You can also look into crowdfunding, which is a way for small businesses or startups to raise money online through donations. These options typically require the ability to promote your business well, ensure complete transparency of where the funds go, and sometimes, the possibility of giving up ownership of a piece of your business. Make sure you look into all of the specifics.
You might be hoping to rely on a conventional loan from a bank, credit union or other lending institution for your main source of funds. In this case, you would need a formal business plan to present during your loan application process. If approved, you would be required to sign a legal contract, or a Promissory Note, outlining your obligations to the lender (which would primarily entail regular payments until the loan is paid off). If you are a first-time business owner, it is likely that you may be rejected initially. In that case, you can improve your application and reapply, or look into alternative sources of funding such as short-term financing via credit cards.
Using a credit card as a means of obtaining a fast and easy business loan would grant you use of immediate funds without the hassle and paperwork of loan applications or business plans. This is the best option for a brand new business, and we work with Nav to give our customers access to the credit they need. Visit our financing page and fill out the form for more information.
There are many credit cards that have low or no annual fees, low introductory interest rates, and other rewards depending on your spending. But be careful: make sure you pay back your credit card before the promotional low interest rate expires and skyrockets, or prior to having to pay large annual fees. And don’t make large purchases that can take years to pay back. For example, getting an equipment loan to purchase a piece of equipment is smarter than putting it on a credit card. Credit cards can be a good temporary solution if your business plan will allow you to pay back the debt quickly.
Another option at your disposal is a government-sponsored grant or loan program. Traditional lenders can turn to federal, state, or local governments to finance their business if such a grant or program is available. Typically, these programs consider sponsoring specific type of businesses or certain business owners, so be sure to research what government-sponsored loan your particular business or you might be eligible for.
Lastly, you can invite new members to your team. If you could see your businesses strategy succeeding with a partner or multiple partners, pool together your financial resources with another member to support your startup. An advantage to this funding option is your partner(s) may come with their own social network of business contacts and possibly even their own potential investors. To protect yourself, you can adjust your Operating Agreement and ensure that you are still the primary owner of the LLC.
Raise Funds for Your LLC
You can’t start a business with zero capital. There are legal fees, the Vermont LLC filing fee, taxes, employees to pay if you are not an SMLLC, as well as the general Vermont LLC cost.
Create a Business Website
Creating a website for your business is not one of the Vermont requirements but it is recommended to any business owner operating in the modern world. An online presence is important to have and maintain in order to ensure that your customers trust your company and know they will receive good customer service. Having a website gives your business legitimacy; your customers will visit your website and see that you are a real company with an actual website where they can read about the company’s origin and products/services and access contact information. Being able to read up on a company on their website leads to trust between a consumer and an organization. Also, dependable customer service is often offered through a website. By offering an email address, a contact form, and/or live chat with a representative on your website, you are making it easy for a customer to get connected with someone knowledgeable about the product/service. That allows a customer to know that there is a real person who cares about their satisfaction within the company that they are doing business with.
Start LLC formationIf the website is outdated or there is no website, a consumer may feel that you are not a legitimate business but a scam with no licenses to back up your business’ operations. You can avoid losing customers due to not having a professional website by ensuring that you have one. We work with GoNorth Websites to provide new businesses with high quality, cost-effective websites. Find out more about our custom designed, written, and developed websites, plus optional internet marketing add-ons that help you grow your business.
But websites needs maintenance too. You can’t simply have one created and never update it throughout the years. Policies and terms change, companies grow, products/services improve, and all of that (and more) can be reflected on the website. This keeps your customers up-to-date and offers a personal touch that is valued by any consumer.
In addition, you can look into having a blog or utilizing social media as another means of keeping your customers in-the-know and offering them a way to interact with your company. An online and/or social media presence can also lead to responsive customers who can offer you feedback on how you’re doing—plus, it’ll help get your company’s name out there.
If this all sounds like more than you’d like to deal with on your own, know that you can hire someone to maintain your website and social media presence for you—just like you can hire customer representatives to handle all correspondence. You can employ a web agency to monitor your website and/or a social media marketing agency to manage your social media campaign. A social media campaign is a coordinated marketing plan that can assist you with your business goals, which translates into extra advertising for your new business.Marketing your company can help you have a more profitable business and can aid you with paying back your business loans quicker—something any business owner aims for. Regardless of industry, all businesses should consider having a website as part of the first steps of starting a business.
T The Benefits of Having an Online Presence
If you’ve decided that you want to have a website for your business, keep a few things in mind. When coming up with a website name, make sure that the domain contains your business name and is easy to type and remember for future visits. If you come up with a great web domain that you’d like to use for your business but you don’t plan to create a business website today, you may want to buy the URL to prevent others from acquiring it.
While brainstorming website URLs for your website, you’re going to either realize that you already know what your business is going to be named or that you have no idea what or how to name your business. Here are a few quick Vermont LLC name tips:
- Follow LLC naming guidelines. Make sure that the name of your business ends with the phrase “Limited Liability Company” or the abbreviation “LLC.” It’s also important not to use any words or phrases that will make it easy for someone to mistake your company for a federal agency; think “State Department.”
- Find a unique name. If you’re getting an LLC in Vermont you will need an original name that is not in use by another LLC. To check if a name has already been taken, you can search the Business Name Availability Database.
- Make sure it is available as a web domain. This way, you can find out if another company outside of Vermont has a business with the same name. In that case, think of something more original.
Create a Business Website
Creating a website for your business is not a requirement but it is recommended to any business owner operating in the modern world.
Begin Operating Your Business
After starting an LLC business in Vermont, make sure to keep your LLC compliant. To do so, keep track of all important dates, such as those for filing annual documents and license/permit renewals, and pay all necessary VT LLC fees. If you’d rather not do these tasks yourself, you can sign up for a service that will automatically send you alerts ahead of crucial state and federal filing deadlines. Likewise, you can hire an accountant, a tax professional, and/or an attorney to ensure you are not making errors when keeping records, filling out paperwork, and making payments.
You can begin operating your business in Vermont with peace of mind, knowing that you are protected by an LLC in case anything unforeseeable affects your new business venture.
Begin Operating Your Business
After starting an LLC business in Vermont, make sure to keep your LLC compliant. To do so, keep track of all important dates, such as those for filing annual documents and license/permit renewals, and pay all necessary VT LLC fees.
Utah - LLC
Learn the Benefits of an LLC
There are many benefits to setting up an LLC in Utah. LLCs not only have more tax options, but they also offer decreased liability, reduced record keeping, and sharing of profits. They are simpler to set up and maintain, with much simpler rules and regulations. There is decidedly less registration paperwork and lower-costing startup expenses. The cost to form an LLC in Utah is not as high as it is for a Utah corp or S corp.
But is an LLC the right business structure for you? Some business types come with suggested business structures. For instance, many small business lawyers recommend establishing an LLC in Utah for an e-commerce business. Why? With e-commerce businesses, products fall under product liability statutes. This means that anyone involved in the sale and distribution of the product could be held liable—even if the problem lies with the manufacturer. An LLC provides you with limited liability in case you are sued by creating a separate and distinct legal entity and isolating business assets from your assets. Therefore, compensation can only be taken from the LLC’s assets, not your personal assets.
If there is an issue with a product, an LLC protects you. Compensation can only be taken from the LLC’s assets, not your personal assets.
Start Your LLC NowBesides protecting you and your assets, creating an LLC provides a business owner with more options for federal tax purposes.
- For instance, if an LLC has only one owner, it’s referred to as a single-member LLC or SMLLC. Owners have the option of being taxed as a Sole Proprietorship, an S Corporation, or a C Corporation.
- If an LLC has more than one owner, it’s categorized as a multiple-member LLC. Owners have the option of being taxed as a Partnership, an S Corporation, or a C Corporation.
An advantage to having a UT LLC with multiple members is that the members decide how to report profits and losses for tax purposes and have several options as to how they prefer to be taxed.
For federal tax purposes, if you’re the sole member of an LLC, your business is treated as a disregarded entity. This means that although you and your business are separate entities, the SMLLC’s income and expenses are reported on the owner’s personal tax return rather than an SMLLC tax return, and the IRS ignores the SMLLC’s status as a business entity. However, for purposes of employment tax and certain excise taxes, an SMLLC is still considered a separate entity. The way a sole proprietorship is taxed is the IRS’ default option for a Single Member LLC in Utah State.
In contrast, a corporation only has two choices: S corporation or C corporation. A business operated as a sole proprietorship or a partnership also doesn’t have an option as to how it will be taxed.
For those wanting to open an LLC in Utah, the best part is the fact that it combines the liability protection of a C Corporation with the tax treatment of any of the above business entities. Plus, it is easier to set up than a corporation.
But Utah LLCs have a few disadvantages. If LLC owners do not choose to file for a tax status as a corporation, individual members pay high self-employment taxes. Also, if business owners decide they may want to take the company public and sell stock, a Utah LLC formation does not permit this (unless you file as an S corp in Utah). Despite these disadvantages, creating an LLC for your startup business is usually recommended. It is well worth it to protect your personal assets and simplify the process of forming an LLC in Utah.
Learn the Benefits of an LLC
For most folks looking to start a business in Utah, the best type of company to form is what's known as a Limited Liability Company (LLC). An LLC can:
- Run a business
- Hold assets (such as office equipment/real estate)
- Open a bank account
- Enter into contracts
Assign Member Roles
Now it’s the time to decide whether you will run this business on your own or with another member’s or organization’s assistance, how small or large you intend for your team to be, and which duties each member will have.
- Member-managed LLC - These may consist of single or multiple members. Each member plays an active role in the management and operation of the business and has the authority to make decisions to bind the LLC. This is ideal if the business is small, has limited resources, and all members have management skills.
- Manager-managed LLC - These may consist of single or multiple members, but members must relinquish the authority to the manager and cannot interfere with the manager's operational decisions. This is ideal if your business is too large or complex to efficiently allow the sharing of management duties among all members, or if some of your members do not have management skills.
If you know your LLC will have employees, you also know that you will have to pay them. Plus, you will need to figure out the amount you should deduct from their wages for tax purposes. Employees will need to fill out a W-4 Form, and you will need to give them pay stubs with their tax information. Before this all gets overwhelming, keep in mind that we offer Payroll, Tax and HR compliance solutions with our partner, ADP. We make it easy to pay your employees, track time, and file taxes effortlessly. Plus, you and your employees can view and update payroll information via an app--accessible anywhere, anytime, backed by 24/7 live customer service support.
Assign Member Roles
Now it’s the time to decide whether you will run this business on your own or with another member’s or organization’s assistance, how small or large you intend for your team to be, and which duties each member will have.
Decide on a Registered Agent
Next, figure out who the Registered Agent for the LLC should be. The State of Utah requires every LLC in the state to have one. This enables the state to ensure the delivery of legal mail and that court documents can be tracked appropriately. The Registered Agent will also act as the contact point between Utah State and the LLC. Once you assign someone as your Registered Agent, they can receive official correspondence and documents on behalf of your business.
A Registered Agent can be either an individual who is a resident of Utah or a business entity that is authorized to conduct business in the state (but not your own business). This can be you or someone else within your company, but keep in mind that this person will be through whom the state has contact with your business. This agent will receive legal documents (known as “Service of Process”) that pertain to your business. You are legally required to have one.
- Possess a physical street address located in Utah (no P.O. Box address).
- Be available during regular business hours, typically Monday through Friday, 9 am to 5 pm.
Although the most comfortable option for a Registered Agent would be to name yourself, a friend, or a family member, know that this information will be public record. Not only will the information be searchable on the state’s LLC website, it can also be republished on other sites as well. If you work from home and would much rather keep your home address private, this might not be the best choice. An alternative you can look into is hiring a Utah Registered Agent LLC Service. We also offer a Registered Agent Service for a small charge that you can include as an add-on to your shopping cart.
Decide on a Registered Agent
Next, figure out who the Registered Agent for the LLC should be. The State of Utah requires every LLC in the state to have one.
Submit Your Articles
of Organization
While setting up an LLC in Utah, you will need to register an LLC in Utah by submitting what is typically called the Articles of Organization. In Utah, this is referred to as the Certificate of Organization. The form includes information such as the LLC's name and address, the Registered Agent’s information, whether the LLC is run by managers or members, etc. If you also have a Utah Limited Liability Operating Agreement form written out, you would include a copy of it with the Certificate of Organization in your records. Submitting your Certificate of Organization is one of the Utah LLC requirements and the Certificate of Organization is one of the most important State of Utah LLC forms you will need to file.
When filing your Utah LLC application, there are usually non-refundable fees that you have to pay with check or money order, additional fees for hand-delivery of Utah LLC forms, and long wait times whether in person or by mail--especially if you plan to form an LLC in Utah online during peak season. GovDocFiling can speed up the process for you. We can help you form a Utah LLC online, offer you expedited pricing, and give you a free business start-up guide and resources with all filings. You can apply here today.
Once your completed Certificate of Organization Utah LLC form is accepted, congratulations! Your company now exists as a recognized legal entity that is authorized to conduct business within the State of Utah.
Submit Your Articles of Organization
While setting up an LLC in Utah, you will need to register an LLC in Utah by submitting what is typically called the Articles of Organization. In Utah, this is referred to as the Certificate of Organization.
Obtain an Employer
Identification Number
One of the Utah LLC filing requirements is getting an EIN. Your LLC will need to file with the IRS for an Employer Identification Number (EIN), which is a nine-digit number assigned to businesses for tax filing and reporting purposes that allows the IRS to identify the taxpayer. (Note: you do not need an SSN to apply for an EIN, so international applicants are welcome.) Corporations, partnerships, and LLCs require an EIN, while sole proprietors do not. Instead, sole proprietors can use their Social Security Number, but that is not recommended as that exposes you to potential identity theft/fraud. In any case, it is a good idea to obtain one in case the company grows or for banking purposes.
Fortunately, you do not have to waste time dealing with the IRS on your own. Going through the IRS directly to get your EIN can be complicated, confusing, and frustrating. GovDocFiling alleviates the angst and aggravation of Utah business LLC filing with the government, including applying for an EIN, or Tax ID number. Plus, GovDocFiling has one low price for same-day processing and delivery of your EIN (other Tax ID filing services charge more than $300 for same-day service!). Easily apply for your EIN/Tax ID online here. In addition, if you have any questions about obtaining an EIN, we offer 24/7 email and phone support to help you through the process. Emails are answered quickly at info@govdocfiling.com.
Once you designate how you prefer to be taxed, that decision must remain in effect for five years before being changed without approval from the IRS.
Obtain an Employer Identification Number
One of the Utah LLC filing requirements is getting an EIN. Your LLC will need to file with the IRS for an Employer Identification Number (EIN), which is a nine-digit number assigned to businesses for tax filing and reporting purposes that allows the IRS to identify the taxpayer.
Fill Out an Operating
Agreement
Once you’ve decided on member roles within your LLC, it is time to create a business contract that holds members to their assigned responsibilities. A Utah Operating Agreement orm is a legal document that determines the financial and working relationships among business owners, members, and managers. Member duties would be explained and “what if” scenarios would be covered (such as what happens if a member leaves the LLC). If you do not have an LLC Operating Agreement in Utah set up for your business, when something unforeseeable happens, it will be up to the state to decide how to proceed justly, and this may not be what you want.
While it is not one of the Utah LLC requirements to have an Operating Agreement, it is still extremely important to have one in order to protect your business.
You can have a lawyer look over your Utah LLC Operating Agreement form prior to submitting it. Get the legal advice you need to protect you and familiarize yourself with Utah LLC law with our partner Rocket Lawyer.Your company is responsible for maintaining copies of the Operating Agreement.
Fill Out an Operating Agreement
Once you’ve decided on member roles within your LLC, it is time to create a business contract that holds members to their assigned responsibilities.
Familiarize Yourself with the
State’s Taxes and Licenses
Income from pass-through entities, such as a Utah Limited Liability Company and Utah S corp, “pass through” the business to the owners, who are required to report this information on their personal tax returns. Each individual LLC member will then have to pay taxes on his or her share of the LLC’s income. The LLC itself does not pay federal income taxes, but some states do charge the LLC other various taxes. Utah’s income tax is a flat rate of 4.95%. You see more details here. In Utah, there is also a property tax rate, a sales tax, and others. More tax information for Utah businesses can be found on the Utah State Tax Commision website.
Like most other states, Utah taxes corporation income, which will apply to you if your LLC is classified as a C corporation. In this case, Utah would treat the LLC as a corporation when it comes to taxes. Therefore, if your Utah LLC files taxes as a corporation, the company itself must file a separate tax return. The corporate income tax in Utah is calculated at a flat rate of 5% of taxable income (with a minimum tax of $100).
In addition, there may be extra fees for certain insurances, permits, and licenses, depending on the state’s laws and the type of business you own. For example, you may need worker’s compensation, unemployment insurance, building permits, etc. Find out the requirements for LLCs in the state you plan to run your business in. Permits and licences depending on profession can be on the Utah Government website Keep in mind that different cities or counties may require certain permits and licenses that other regions do not. Contact your city or county to see if there are any insurances, permits, or licenses you might need to obtain before you begin operating your business.
Familiarize Yourself with the State’s Taxes and Licenses
Income from pass-through entities, such as a Utah Limited Liability Company and Utah S corp, “pass through” the business to the owners, who are required to report this information on their personal tax returns.
File an Annual Renewal
Most states require that all LLC owners file a report that updates all the information that the State has on file. This report is usually called an Annual Report, but in Utah, it is called an Annual Renewal. Also, Utah does not have a Secretary of State office. Instead, various state agencies and offices take care of any Utah government needs. More information on those agencies and offices can be found here.
Annual Renewals are due every year by the end of the month of initial registration. You can start filing 60 days prior to that date. When filing your Annual Renewal, you must include a filing fee of $20. Lates fees are an additional $25. Utah LLC filing is available online or via printing and mailing the report. Instructions for both methods can be found on the Utah Government website. Filing an Annual Renewal is necessary for maintaining an active status after starting an LLC in Utah. Not filing the report or paying the fee will result in being presented a Utah LLC dissolution form, after which the state will dissolve your business. The Utah Department of Corporations has more information on Annual Renewals.
Annual Renewals can be rather complex–requiring the deciphering of gross receipts, dividends, interest, losses, and all Utah LLC fees–and you should seek the help of an accountant to ensure that it is filled out properly. Our partner, Bench, will provide you with a team of accountants to help you with your franchise tax reports, as well as general bookkeeping services with monthly financial statements and intuitive software to monitor your business profits and expenses.
File an Annual Renewal
Most states require that all LLC owners file a report that updates all the information that the State has on file. This report is usually called an Annual Report, but in Utah, it is called an Annual Renewal.
Raise Funds for Your LLC
You can’t start a business with zero capital. There are legal fees, the Utah LLC filing fee, taxes, employees to pay if you are not an SMLLC, as well as the general Utah LLC cost. Some of the most commonly-used options for obtaining funding for your LLC are:
- Personal savings and assets
- Informal loans from family and friends
- Peer-to-peer lending sites or crowdfunding
- Conventional bank loan
- Short-term credit card loans
- Government-sponsored grants/loan programs
- Adding LLC owners
Many new LLC owners begin with their savings to fund their new business venture. If your savings are not enough, you may need to look into liquidating your personal assets or use them as collateral for loans. Can you sell your property or refinance your home? Do you have a retirement account such as a Traditional or Roth IRA? Usually, you can withdraw contributions you made to your IRA anytime, tax- and penalty-free, but that is not always the case. Find out what kind of fees your particular retirement plan will hit you with before using your IRA to fund your business.
Next, look into whether you know someone who shares your passion for your business and has the ability to contribute financially to your dream. These personal connections may want to support your startup idea. Although accepting an informal loan from a close friend or relative may feel safe, you should still protect yourself in case your relationship with the friend or family member goes sour. Have an official contract drawn up that all parties agree to. You can choose to have it notarized and have witnesses present for extra protection.
If you prefer not to borrow from friends and family, you can turn to a peer-to-peer (P2P) or social lending website. A P2P site is a place where investors seek out alternative opportunities to invest outside of stocks and bonds. You can apply for a loan and investors can decide whether or not they wish to fund your proposed business through interest-based loans. You can also look into crowdfunding, which is a way for small businesses or startups to raise money online through donations. These options typically require the ability to promote your business well, ensure complete transparency of where the funds go, and sometimes, the possibility of giving up ownership of a piece of your business. Make sure you look into all of the specifics.
You might be hoping to rely on a conventional loan from a bank, credit union or other lending institution for your main source of funds. In this case, you would need a formal business plan to present during your loan application process. If approved, you would be required to sign a legal contract, or a Promissory Note, outlining your obligations to the lender (which would primarily entail regular payments until the loan is paid off). If you are a first-time business owner, it is likely that you may be rejected initially. In that case, you can improve your application and reapply, or look into alternative sources of funding such as short-term financing via credit cards.
Using a credit card as a means of obtaining a fast and easy business loan would grant you use of immediate funds without the hassle and paperwork of loan applications or business plans. This is the best option for a brand new business, and we work with Nav to give our customers access to the credit they need. Visit our financing page and fill out the form for more information.
There are many credit cards that have low or no annual fees, low introductory interest rates, and other rewards depending on your spending. But be careful: make sure you pay back your credit card before the promotional low interest rate expires and skyrockets, or prior to having to pay large annual fees. And don’t make large purchases that can take years to pay back. For example, getting an equipment loan to purchase a piece of equipment is smarter than putting it on a credit card. Credit cards can be a good temporary solution if your business plan will allow you to pay back the debt quickly.
Another option at your disposal is a government-sponsored grant or loan program. Traditional lenders can turn to federal, state, or local governments to finance their business if such a grant or program is available. Typically, these programs consider sponsoring specific type of businesses or certain business owners, so be sure to research what government-sponsored loan your particular business or you might be eligible for.
Lastly, you can invite new members to your team. If you could see your businesses strategy succeeding with a partner or multiple partners, pool together your financial resources with another member to support your startup. An advantage to this funding option is your partner(s) may come with their own social network of business contacts and possibly even their own potential investors. To protect yourself, you can adjust your State of Utah LLC Operating Agreement and ensure that you are still the primary owner of the LLC.
Raise Funds for Your LLC
You can’t start a business with zero capital. There are legal fees, the Utah LLC filing fee, taxes, employees to pay if you are not an SMLLC, as well as the general Utah LLC cost.
Create a Business Website
Creating a website for your business is not a requirement but it is recommended to any business owner operating in the modern world. An online presence is important to have and maintain in order to ensure that your customers trust your company and know they will receive good customer service. Having a website gives your business legitimacy; your customers will visit your website and see that you are a real company with an actual website where they can read about the company’s origin and products/services and access contact information. Being able to read up on a company on their website leads to trust between a consumer and an organization. Also, dependable customer service is often offered through a website. By offering an email address, a contact form, and/or live chat with a representative on your website, you are making it easy for a customer to get connected with someone knowledgeable about the product/service. That allows a customer to know that there is a real person who cares about their satisfaction within the company that they are doing business with.
Start LLC formationIf the website is outdated or there is no website, a consumer may feel that you are not a legitimate business but a scam with no licenses to back up your business’ operations. You can avoid losing customers due to not having a professional website by ensuring that you have one. We work with GoNorth Websites to provide new businesses with high quality, cost-effective websites. Find out more about our custom designed, written, and developed websites, plus optional internet marketing add-ons that help you grow your business.
But websites needs maintenance too. You can’t simply have one created and never update it throughout the years. Policies and terms change, companies grow, products/services improve, and all of that (and more) can be reflected on the website. This keeps your customers up-to-date and offers a personal touch that is valued by any consumer.
In addition, you can look into having a blog or utilizing social media as another means of keeping your customers in-the-know and offering them a way to interact with your company. An online and/or social media presence can also lead to responsive customers who can offer you feedback on how you’re doing—plus, it’ll help get your company’s name out there.
If this all sounds like more than you’d like to deal with on your own, know that you can hire someone to maintain your website and social media presence for you—just like you can hire customer representatives to handle all correspondence. You can employ a web agency to monitor your website and/or a social media marketing agency to manage your social media campaign. A social media campaign is a coordinated marketing plan that can assist you with your business goals, which translates into extra advertising for your new business.Marketing your company can help you have a more profitable business and can aid you with paying back your business loans quicker—something any business owner aims for. Regardless of industry, all businesses should consider having a website as part of the first steps of starting a business.
T The Benefits of Having an Online Presence
If you’ve decided that you want to have a website for your business, keep a few things in mind. When coming up with a website name, make sure that the domain contains your business name and is easy to type and remember for future visits. If you come up with a great web domain that you’d like to use for your business but you don’t plan to create a business website today, you may want to buy the URL to prevent others from acquiring it.
While brainstorming website URLs for your website, you’re going to either realize that you already know what your business is going to be named or that you have no idea what or how to name your business. Here are a few quick Utah LLC name tips:
- Follow LLC naming guidelines. Make sure that the name of your business ends with the phrase “Limited Liability Company” or the abbreviation “LLC.” It’s also important not to use any words or phrases that will make it easy for someone to mistake your company for a federal agency; think “State Department.”
- Find a unique name. If you’re getting an LLC in Utah you will need an original name that is not in use by another LLC. To check if a name has already been taken, you can search the Business Name Availability Database.
- Make sure it is available as a web domain. This way, you can find out if another company outside of Utah has a business with the same name. In that case, think of something more original.
Create a Business Website
Creating a website for your business is not a requirement but it is recommended to any business owner operating in the modern world.
Begin Operating Your Business
After starting an LLC business in Utah, make sure to keep your LLC compliant. To do so, keep track of all important dates, such as those for filing annual documents and license/permit renewals, and pay all necessary UT LLC fees. If you’d rather not do these tasks yourself, you can sign up for a service that will automatically send you alerts ahead of crucial state and federal filing deadlines. Likewise, you can hire an accountant, a tax professional, and/or an attorney to ensure you are not making errors when keeping records, filling out paperwork, and making payments.
You can begin operating your business in Utah with peace of mind, knowing that you are protected by an LLC in case anything unforeseeable affects your new business venture.
Begin Operating Your Business
After starting an LLC business in Utah, make sure to keep your LLC compliant. To do so, keep track of all important dates, such as those for filing annual documents and license/permit renewals, and pay all necessary UT LLC fees.
Texas - LLC
Learn the Benefits of an LLC
There are many benefits to setting up your business as an LLC. LLCs not only have more tax options, but they also offer decreased liability, reduced record keeping, and sharing of profits. They are simpler to set up and maintain, with much simpler rules and regulations. There is decidedly less registration paperwork and lower-costing startup expenses.
But is an LLC the right business structure for you? Some business types come with suggested business structures. For instance, many small business lawyers recommend you create an LLC for an e-commerce business. Why? With e-commerce businesses, products fall under product liability statutes. This means that anyone involved in the sale and distribution of the product could be held liable—even if the problem lies with the manufacturer. An LLC provides you with limited liability in case you are sued by creating a separate and distinct legal entity and isolating business assets from your assets. Therefore, compensation can only be taken from the LLC’s assets, not your personal assets.
If there is an issue with a product, an LLC protects you. Compensation can only be taken from the LLC’s assets, not your personal assets.
Start Your LLC NowBesides protecting you and your assets, creating an LLC provides a business owner with more options for federal tax purposes.
- For instance, if an LLC has only one owner, it’s referred to as a single-member LLC or SMLLC. Owners have the option of being taxed as a Sole Proprietorship, an S Corporation, or a C Corporation.
- If an LLC has more than one owner, it’s categorized as a multiple-member LLC. Owners have the option of being taxed as a Partnership, an S Corporation, or a C Corporation.
All LLC members will need to pay federal and Texas income tax plus federal self-employment tax on their share of the profits. Self-employment tax covers the Medicare and Social Security contributions that are not withheld from their paycheck. An advantage to having a TX LLC with multiple members is that the members decide how to report profits and losses for tax purposes and have several options as to how they prefer to be taxed (for example, an S or C corp or a partnership).
For federal tax purposes, if you’re the sole member of an LLC, your business is treated as a disregarded entity. This means that although you and your business are separate entities, the SMLLC’s income and expenses are reported on the owner’s personal tax return rather than an SMLLC tax return, and the IRS ignores the SMLLC’s status as a business entity. However, for purposes of employment tax and certain excise taxes, an SMLLC is still considered a separate entity.
In contrast, a corporation only has two choices: S corporation or C corporation. A business operated as a sole proprietorship or a partnership also doesn’t have an option as to how it will be taxed.
For those who want to start an LLC in Texas—keep in mind that Texas isn’t like any other state. Besides simply setting up as an LLC, Texas also has PLLCs (Professional LLCs). If you want to organize your entity as an LLC and you will be performing professional services, then the state may require you to form a professional LLC in Texas.. A list of which businesses might fall under the category of a Texas PLLC can be found here.
But Texas LLCs have a few disadvantages. If LLC owners do not choose to file for a tax status as a corporation, individual members pay high self-employment taxes. Those taxes often are higher than corporate taxes. Also, if business owners contemplate taking the company public and selling stock, an LLC does not permit this (unless you file as an S corporation). Despite these disadvantages, creating an LLC for your startup business is usually recommended. It is well worth it to protect your personal assets and simplify the process of starting a business.
Understand the Advantages of Forming an LLC in Texas
Forming a Limited Liability Company (LLC) is the easiest and fastest way to launch your business in Texas. LLCs offer more tax options, less liability, reduced record-keeping, and profit-sharing.
All of these advantages make LLCs a popular choice among budding entrepreneurs in Texas.
Assign Member Roles
Now it’s the time to decide whether you will run this business on your own or with another member’s or organization’s assistance, how small or large you intend for your team to be, and which duties each member will have.
- Member-managed LLC - These may consist of single or multiple members. Each member plays an active role in the management and operation of the business and has the authority to make decisions to bind the LLC. This is ideal if the business is small, has limited resources, and all members have management skills.
- Manager-managed LLC - These may consist of single or multiple members, but members must relinquish the authority to the manager and cannot interfere with the manager's operational decisions. This is ideal if your business is too large or complex to efficiently allow the sharing of management duties among all members, or if some of your members do not have management skills.
If you know your LLC will have employees, you also know that you will have to pay them. Plus, you will need to figure out the amount you should deduct from their wages for tax purposes. Employees will need to fill out a W-4 Form, and you will need to give them pay stubs with their tax information. Before this all gets overwhelming, keep in mind that we offer Payroll, Tax and HR compliance solutions with our partner, ADP. We make it easy to pay your employees, track time, and file taxes effortlessly. Plus, you and your employees can view and update payroll information via an app--accessible anywhere, anytime, backed by 24/7 live customer service support.
Determine the Roles & Responsibilities of All LLC Members
Do you want a single-member LLC or a multi-member LLC? In the case of a multi-member LLC, you’ll need to determine the size of your team and the responsibilities of each member.
You will also have to choose a management structure for your LLC in Texas. You can either choose to start a member-managed LLC (all members participate in decision-making) or a manager-managed LLC (an appointed manager handles decision-making).
Decide on a Registered Agent
Next, figure out who the Registered Agent for your LLC should be. The State of Texas requires every LLC in the state to have one. This enables the state to ensure the delivery of legal mail and that court documents can be tracked appropriately. The Registered Agent will also act as the contact point between your LLC and the Texas Secretary of State’s office. Once you assign someone as your Registered Agent, they can receive official correspondence and documents on behalf of your business.
A Registered Agent can be either an individual who is a resident of Texas or a business entity that is authorized to conduct business in the state (but not your own business). This can be you or someone else within your company, but keep in mind that this person will be through whom the state has contact with your business. This agent will receive legal documents (known as “Service of Process”) that pertain to your business. You are legally required to have one.
- Possess a physical street address located in Texas (no P.O. Box address).
- Be available during regular business hours, typically Monday through Friday, 9 am to 5 pm.
Although the most comfortable option for a Registered Agent would be to name yourself, a friend, or a family member, know that this information will be public record. Not only will the information be searchable on the state’s LLC website, it can also be republished on other sites as well. If you work from home and would much rather keep your home address private, this might not be the best choice. An alternative you can look into is hiring a Texas Registered Agent LLC Service. We also offer a Registered Agent Service for a small charge that you can include as an add-on to your shopping cart.
Figure Out Who the Registered Agent for Your LLC Should Be
The State of Texas requires that every LLC has a Registered Agent who will be the point of contact between your LLC and the Texas Secretary of State’s office. The Registered Agent will receive all official correspondence and legal documents on behalf of your business.
Submit Your Articles
of Organization
Typically, this is called the Articles of Organization, but in Texas, Certificate of Formation is the more common title for the document. To begin setting up an LLC in Texas, you will need to register your business by filing the Texas LLC Certificate of Formation. This requires filling out a form to ensure compliance with the Texas Secretary of State LLC formation laws. This form includes information such as the LLC's name and address, the registered agent’s information, whether the LLC is run by managers or members, etc. If you also have an Operating Agreement written out, you would include a copy of it with the Certificate of Formation while submitting it.
It is a requirement by the Texas SOS for LLCs to submit this form. Failure to register will result in monetary penalties as well as other legal issues. In addition, anyone owing money to the business will not be obligated to pay.
The cost to start an LLC in Texas varies depending on how carefully this form is filled out. If filing on your own, there are usually non-refundable fees that you have to pay with check or money order, additional fees for hand-delivery of forms, and long wait times whether in person or by mail—especially if you’re filing for an LLC during peak season. Any errors on the form will require re-filing. GovDocFiling can speed up the process for you. We offer an easy online application, expedited pricing, and a free business start-up guide and resources with all filings. You can apply here today.
Once your completed Texas Certificate of Formation is accepted, congratulations! Your company now exists as a recognized legal entity that is authorized to conduct business within the State of Texas.
File the Texas LLC Certificate of Formation
This document is commonly referred to as the “Articles of Organization” in most states, but in Texas, we call it the Certificate of Formation. You need to fill out a form to ensure compliance with the Texas Secretary of State LLC formation laws. Once it is accepted, you can operate as a recognized legal entity and conduct business within the state of Texas.
Obtain an Employer
Identification Number
Next, your LLC will need to file with the IRS for an Employer Identification Number (EIN). This is a nine-digit number assigned to businesses for tax filing and reporting purposes that allows the IRS to identify the taxpayer. (Note: you do not need an SSN to apply for an EIN, so international applicants are welcome.) Corporations, partnerships, and LLCs require an EIN, while sole proprietors do not. Instead, sole proprietors can use their Social Security Number, but that is not recommended as that exposes you to potential identity theft/fraud. In any case, it is a good idea to obtain one in case the company grows or for banking purposes.
Fortunately, you do not have to waste time dealing with the IRS on your own. Going through the IRS directly to get your EIN can be complicated, confusing, and frustrating. GovDocFiling alleviates the angst and aggravation of filing government documents, including applying for an EIN, or Tax ID number. Plus, GovDocFiling has one low price for same-day processing and delivery of your EIN (other Tax ID filing services charge more than $300 for same-day service!). Easily apply for your EIN/Tax ID online here. In addition, if you have any questions about obtaining an EIN, we offer 24/7 email and phone support to help you through the process. Emails are answered quickly at info@govdocfiling.com.
Once you designate how you prefer to be taxed, that decision must remain in effect for five years before being changed without approval from the IRS.
Get a Federal Employer Identification Number (EIN)
You need to file with the IRS for a Federal Employer Identification Number (EIN). This 9-digit number assigned to businesses in Texas for tax filing and reporting purposes allows the IRS to identify taxpayers.
We allow businesses to easily apply for an EIN/Tax ID online and provide 24/7 email and phone support to help you through the process.
Fill Out an Operating
Agreement
Once you’ve decided on member roles within your LLC, it is time to create a business contract that holds members to their assigned responsibilities. A Texas Operating Agreement orm is a legal document that determines the financial and working relationships among business owners, members, and managers. Member duties would be explained and “what if” scenarios would be covered (such as what happens if a member leaves the LLC). If you do not have an LLC Operating Agreement in Texas set up for your business, when something unforeseeable happens, it will be up to the state to decide how to proceed justly, and this may not be what you want.
If you do not have an Operating Agreement set up for your business, when something unforeseeable happens, it will be up to the state to decide how to proceed justly, and this may not be what you want. The State of Texas recognizes Operating Agreements as governing documents, assigning the roles of each member, who manages the LLC, how members are admitted/removed, dissolution of the LLC, and more.
While it is not one of the Texas LLC requirements to have an Operating Agreement, it is still extremely important to have one in order to protect your business.
You can have a lawyer look over your Texas LLC Operating Agreement form prior to submitting it. Get the legal advice you need to protect you and familiarize yourself with Texas LLC law with our partner Rocket Lawyer.Your company is responsible for maintaining copies of the Operating Agreement.
Create an LLC Operating Agreement
Creating an LLC Operating Agreement lays the foundation of any new business in the state of Texas.
The State of Texas recognizes your Operating Agreement as a governing document to make decisions when something unforeseeable happens. It includes details such as the roles of each LLC member, who manages your LLC, how members are admitted/removed, and the dissolution of your LLC in Texas.
Familiarize Yourself with the
State’s Taxes and Licenses
The profits of a Texas LLC are not taxed at the business level like those of C Corporations. Instead, here are some tax requirements for a Texas LLC:
- Self-employment tax on business profits
- Federal income tax on any profits minus business expense deductions
- Possible Texas sales tax on products
- Payroll tax for employers
- Federal, state and payroll tax for employees
To go into further detail, LLCs grant a “pass-through” treatment of income for any LLC owners, managers or members who make any profits from the business. This applies to numbers 1-2 above. Unlike most other states, Texas does not have a state income tax to pay on LLC earnings.
In addition, businesses in Texas may require additional licenses and permits from the Texas Secretary of State. For example, if you’ll be selling any goods or services, you’ll need to apply for a Texas Sales Tax Permit by filing a Texas Sales Tax Permit Application with the Texas Comptroller’s office.
There may be extra fees for certain other permits, licenses, and insurances. Texas workers’ compensation laws do not make it mandatory for all employers to have occupational injury insurance coverage, but there are some exceptions, such as construction contracts for governmental entities. Plus, different cities or counties may require certain permits and licenses. Here are some of the most common licenses and permits you may need.
- Building Permit
- Business License
- Health Permit
- Occupational Permit
- Zoning Permit
You can find a list of most permits and licenses required in Texas here. Find out from your city or county if there are any other permits you might need to obtain before you begin operating your business.
Learn About Texas LLC Taxes & Licenses
The State of Texas doesn’t have a state income tax to pay on LLC earnings. The tax requirements of a Texas LLC include self-employment tax on business profits, the Federal income tax on profits minus expenses, and the payroll tax for employers and employees.
File a Public Information Report
The State of Texas does not require LLCs to file an annual report, like most states. Instead, Texas requires the filing of a Franchise Tax Report. More commonly, it is referred to as a Public Information Report on an LLC’s annual franchise tax. This Franchise Tax Report is submitted to the Texas Comptroller of Public Accounts (CPA) by May 15 of each year.
Good news for prospective LLC owners in Texas: while some states charge over $500 every single year as a required fee that all LLC owners must pay when submitting their Reports, Texas does not require any additional fees simply for processing the Public Information Report.
The report can be rather complex–requiring the deciphering of gross receipts, dividends, interest, losses, etc.–and you should seek the help of an accountant to ensure that it is filled out properly. Our partner, Bench, will provide you with a team of accountants to help you with your franchise tax reports, as well as general bookkeeping services with monthly financial statements and intuitive software to monitor your business profits and expenses.
File a Franchise Tax Report for Your LLC in Texas
The state of Texas requires all LLCs to file a Franchise Tax Report, more commonly referred to as “Public Information Report.” You need to submit this report to the Texas Comptroller of Public Accounts (CPA) every year by May 15th.
Raise Funds for Your LLC
You can’t start a business with zero capital. There are legal fees, document filing fees, taxes, employees to pay if you are not an SMLLC, as well as the costs of operating a business. Some of the most commonly-used options for obtaining funding for your LLC are:
- Personal savings and assets
- Informal loans from family and friends
- Peer-to-peer lending sites or crowdfunding
- Conventional bank loan
- Short-term credit card loans
- Government-sponsored grants/loan programs
- Adding LLC owners
Many new LLC owners begin with their savings to fund their new business venture. If your savings are not enough, you may need to look into liquidating your personal assets or use them as collateral for loans. Can you sell your property or refinance your home? Do you have a retirement account such as a Traditional or Roth IRA? Usually, you can withdraw contributions you made to your IRA anytime, tax- and penalty-free, but that is not always the case. Find out what kind of fees your particular retirement plan will hit you with before using your IRA to fund your business.
Next, look into whether you know someone who shares your passion for your business and has the ability to contribute financially to your dream. These personal connections may want to support your startup idea. Although accepting an informal loan from a close friend or relative may feel safe, you should still protect yourself in case your relationship with the friend or family member goes sour. Have an official contract drawn up that all parties agree to. You can choose to have it notarized and have witnesses present for extra protection.
If you prefer not to borrow from friends and family, you can turn to a peer-to-peer (P2P) or social lending website. A P2P site is a place where investors seek out alternative opportunities to invest outside of stocks and bonds. You can apply for a loan and investors can decide whether or not they wish to fund your proposed business through interest-based loans. You can also look into crowdfunding, which is a way for small businesses or startups to raise money online through donations. These options typically require the ability to promote your business well, ensure complete transparency of where the funds go, and sometimes, the possibility of giving up ownership of a piece of your business. Make sure you look into all of the specifics.
You might be hoping to rely on a conventional loan from a bank, credit union or other lending institution for your main source of funds. In this case, you would need a formal business plan to present during your loan application process. If approved, you would be required to sign a legal contract, or a Promissory Note, outlining your obligations to the lender (which would primarily entail regular payments until the loan is paid off). If you are a first-time business owner, it is likely that you may be rejected initially. In that case, you can improve your application and reapply, or look into alternative sources of funding such as short-term financing via credit cards.
Using a credit card as a means of obtaining a fast and easy business loan would grant you use of immediate funds without the hassle and paperwork of loan applications or business plans. This is the best option for a brand new business, and we work with Nav to give our customers access to the credit they need. Visit our financing page and fill out the form for more information.
There are many credit cards that have low or no annual fees, low introductory interest rates, and other rewards depending on your spending. But be careful: make sure you pay back your credit card before the promotional low interest rate expires and skyrockets, or prior to having to pay large annual fees. And don’t make large purchases that can take years to pay back. For example, getting an equipment loan to purchase a piece of equipment is smarter than putting it on a credit card. Credit cards can be a good temporary solution if your business plan will allow you to pay back the debt quickly.
Another option at your disposal is a government-sponsored grant or loan program. Traditional lenders can turn to federal, state, or local governments to finance their business if such a grant or program is available. Typically, these programs consider sponsoring specific type of businesses or certain business owners, so be sure to research what government-sponsored loan your particular business or you might be eligible for.
Lastly, you can invite new members to your team. If you could see your businesses strategy succeeding with a partner or multiple partners, pool together your financial resources with another member to support your startup. An advantage to this funding option is your partner(s) may come with their own social network of business contacts and possibly even their own potential investors. To protect yourself, you can adjust your Operating Agreement and ensure that you are still the primary owner of the Texas LLC.
Raise Capital for Forming Your LLC in Texas
To set up your LLC in Texas, you need capital because there are many expenses involved. Some of them include legal fees, taxes, document filing fees, employees’ pay, and operational costs of your business.
Create a Business Website
Creating a website for your business is not a requirement but it is recommended to any business owner operating in the modern world. An online presence is important to have and maintain in order to ensure that your customers trust your company and know they will receive good customer service. Having a website gives your business legitimacy; your customers will visit your website and see that you are a real company with an actual website where they can read about the company’s origin and products/services and access contact information. Being able to read up on a company on their website leads to trust between a consumer and an organization. Also, dependable customer service is often offered through a website. By offering an email address, a contact form, and/or live chat with a representative on your website, you are making it easy for a customer to get connected with someone knowledgeable about the product/service. That allows a customer to know that there is a real person who cares about their satisfaction within the company that they are doing business with.
Start LLC formationIf the website is outdated or there is no website, a consumer may feel that you are not a legitimate business but a scam with no licenses to back up your business’ operations. You can avoid losing customers due to not having a professional website by ensuring that you have one. We work with GoNorth Websites to provide new businesses with high quality, cost-effective websites. Find out more about our custom designed, written, and developed websites, plus optional internet marketing add-ons that help you grow your business.
But websites needs maintenance too. You can’t simply have one created and never update it throughout the years. Policies and terms change, companies grow, products/services improve, and all of that (and more) can be reflected on the website. This keeps your customers up-to-date and offers a personal touch that is valued by any consumer.
In addition, you can look into having a blog or utilizing social media as another means of keeping your customers in-the-know and offering them a way to interact with your company. An online and/or social media presence can also lead to responsive customers who can offer you feedback on how you’re doing—plus, it’ll help get your company’s name out there.
If this all sounds like more than you’d like to deal with on your own, know that you can hire someone to maintain your website and social media presence for you—just like you can hire customer representatives to handle all correspondence. You can employ a web agency to monitor your website and/or a social media marketing agency to manage your social media campaign. A social media campaign is a coordinated marketing plan that can assist you with your business goals, which translates into extra advertising for your new business.Marketing your company can help you have a more profitable business and can aid you with paying back your business loans quicker—something any business owner aims for. Regardless of industry, all businesses should consider having a website as part of the first steps of starting a business.
T The Benefits of Having an Online Presence
If you’ve decided that you want to have a website for your business, keep a few things in mind. When coming up with a website name, make sure that the domain contains your business name and is easy to type and remember for future visits. If you come up with a great web domain that you’d like to use for your business but you don’t plan to create a business website today, you may want to buy the URL to prevent others from acquiring it.
While brainstorming website URLs for your website, you’re going to either realize that you already know what your business is going to be named or that you have no idea what or how to name your business. Here are a few quick Texas LLC name tips:
- Follow LLC naming guidelines. Make sure that the name of your business ends with the phrase “Limited Liability Company” or the abbreviation “LLC.” It’s also important not to use any words or phrases that will make it easy for someone to mistake your company for a federal agency; think “State Department.”
- Find a unique name. If you’re getting an LLC in Texas you will need an original name that is not in use by another LLC. To check if a name has already been taken, you can search the Texas Name Availability Database.
- Make sure it is available as a web domain. This way, you can find out if another company outside of Texas has a business with the same name. In that case, think of something more original.
Build a Website for Your Texas LLC
To operate a business today, it is essential to build and maintain an online presence. It will help you get people to trust your brand and buy from you.
For this, you need to build a professional business website that is mobile-friendly and provides all important information.
Begin Operating Your Business
Once you become an LLC, make sure you keep your LLC compliant. Remember to file all necessary reports and keep up with all tax payments. If you’d rather not do these tasks yourself, you can sign up for a service that will automatically send you alerts ahead of crucial state and federal filing deadlines. Likewise, you can hire an accountant, a tax professional, and/or an attorney to ensure you are not making errors when keeping records, filling out paperwork, and making payments.
Next, make sure you’ve obtained all necessary licenses and obtained any extra insurance that your LLC might need—and you’re good to go! Register for an LLC in Texas online with GovDocFiling and begin operating your business in TX with peace of mind, knowing that you are protected by an LLC in case anything unforeseeable affects your new business venture.
Run Your LLC Business in Texas
Once your LLC application is approved, you can start operating your business in Texas. You should keep your LLC compliant, file all necessary reports, and pay your taxes on time. You can also hire an accountant or a tax professional for record-keeping and paperwork.
How to Form an LLC in Texas with GovDocFiling
Form an LLC in Texas with us to get your business running in no time. Trust us, it has never been easier.
We at GovDocFiling, offer exclusive LLC formation packages to freelancers, individuals starting a business by themselves, small businesses, and anyone who needs help setting up an LLC. We are here to support both retail and service-based businesses such as cleaning, landscaping, beauty, freelance, consulting, and selling goods online.
Being a small business ourselves, we know how complex these legal procedures can be. That’s why we offer end-to-end LLC formation packages to help you start your LLC application, set up your LLC in Texas, obtain an EIN/Tax ID, and begin operating your business.
Take advantage of our LLC formation and state filing package to launch your business successfully in an easy, quick, and efficient manner.
Easy, quick, low-cost LLC registration
Why Should You Choose GovDocFiling for LLC Formation in Texas?
GovDocFiling is a small business. We have been there, and we understand the challenges you may face during the process of forming your LLC in Texas and setting up your business entity.
Here’s why you should choose GovDocFiling for creating your LLC in Texas over other LLC registration solutions out there:
- More value at the lowest cost.
- Simplified process of applying for LLC formation and the Federal EIN/Tax ID filing unlike most of our competitors.
- Inclusive of 5 essential legal documents that are almost always necessary for a new business to operate in Texas.
- A comprehensive Business Start Up Guide to help you through the process of legally starting an LLC business in Texas.
- Discounts to vetted partners offering essential LLC operations services such as accounting and bookkeeping.
- No additional cost for expedited filing time, unlike others who offer this as an additional service.
- Free tax-saving analysis.
- Cashback on business bank accounts with Chase and Bank of America.
All of these points make us stand out from our competitors and ensure that you have a hassle-free LLC registration and state filing for setting up your business in Texas.
Easy process. Expedited filing time. No additional cost.
End-to-End Offerings for Forming Your LLC in Texas
Our LLC formation packages for individuals and startups include:
- Filing for the Texas LLC Certificate of Formation
- Filing for the Federal Employer Identification Number (EIN)/Tax ID Number from the IRS
- Single & Multi-Member LLC Operating Agreement
- 5 Essential Legal Documents
- Mutual Non-Disclosure Agreement
- Unilateral Non-Disclosure Agreement
- Independent Contractor Agreement
- Employee Agreement
- Confidentiality Agreement
- Free Business Start Up Guide with over $3K in potential savings
Quick LLC registration & state filing. Low cost.
Our Texas LLC Formation Package + Pricing
GovDocFiling is committed to offering expedited filing time for your LLC formation application without any additional costs. We guarantee quick, secure, and hassle-free LLC registration in Texas.
Complete your LLC application in 5 minutes.
Tennessee - LLC
Learn the Benefits of an LLC
There are many benefits to setting up an LLC in Tennessee. LLCs not only have more tax options, but they also offer decreased liability, reduced record keeping, and sharing of profits. They are simpler to set up and maintain, with much simpler rules and regulations. There is decidedly less registration paperwork and lower-costing startup expenses. The cost to form an LLC in Tennessee is not as high as it is for a Tennessee corp or S corp.
But is an LLC the right business structure for you? Some business types come with suggested business structures. For instance, many small business lawyers recommend establishing an LLC in Tennessee for an e-commerce business. Why? With e-commerce businesses, products fall under product liability statutes. This means that anyone involved in the sale and distribution of the product could be held liable—even if the problem lies with the manufacturer. An LLC provides you with limited liability in case you are sued by creating a separate and distinct legal entity and isolating business assets from your assets. Therefore, compensation can only be taken from the LLC’s assets, not your personal assets.
If there is an issue with a product, an LLC protects you. Compensation can only be taken from the LLC’s assets, not your personal assets.
Start Your LLC NowBesides protecting you and your assets, creating an LLC provides a business owner with more options for federal tax purposes.
- For instance, if an LLC has only one owner, it’s referred to as a single-member LLC or SMLLC. Owners have the option of being taxed as a Sole Proprietorship, an S Corporation, or a C Corporation.
- If an LLC has more than one owner, it’s categorized as a multiple-member LLC. Owners have the option of being taxed as a Partnership, an S Corporation, or a C Corporation.
An advantage to having a TN LLC with multiple members is that the members decide how to report profits and losses for tax purposes and have several options as to how they prefer to be taxed.
For federal tax purposes, if you’re the sole member of an LLC, your business is treated as a disregarded entity. This means that although you and your business are separate entities, the SMLLC’s income and expenses are reported on the owner’s personal tax return rather than an SMLLC tax return, and the IRS ignores the SMLLC’s status as a business entity. However, for purposes of employment tax and certain excise taxes, an SMLLC is still considered a separate entity. The way a sole proprietorship is taxed is the IRS’ default option for a Single Member LLC in Tennessee.
In contrast, a corporation only has two choices: S corporation or C corporation. A business operated as a sole proprietorship or a partnership also doesn’t have an option as to how it will be taxed.
For those wanting to open an LLC in Tennessee, the best part is the fact that it combines the liability protection of a C Corporation with the tax treatment of any of the above business entities. Plus, it is easier to set up than a corporation.
But Tennessee LLCs have a few disadvantages. If LLC owners do not choose to file for a tax status as a corporation, individual members pay high self-employment taxes. Also, if business owners decide they may want to take the company public and sell stock, a Tennessee LLC formation does not permit this (unless you file as an S corp in Tennessee). Despite these disadvantages, creating an LLC for your startup business is usually recommended. It is well worth it to protect your personal assets and simplify the process of forming an LLC in TN.
Learn the Benefits of an LLC
For most folks looking to start a business in Tennessee, the best type of company to form is what's known as a Limited Liability Company (LLC). An LLC can:
- Run a business
- Hold assets (such as office equipment/real estate)
- Open a bank account
- Enter into contracts
Assign Member Roles
Now it’s the time to decide whether you will run this business on your own or with another member’s or organization’s assistance, how small or large you intend for your team to be, and which duties each member will have.
- Member-managed LLC - These may consist of single or multiple members. Each member plays an active role in the management and operation of the business and has the authority to make decisions to bind the LLC. This is ideal if the business is small, has limited resources, and all members have management skills.
- Manager-managed LLC - These may consist of single or multiple members, but members must relinquish the authority to the manager and cannot interfere with the manager's operational decisions. This is ideal if your business is too large or complex to efficiently allow the sharing of management duties among all members, or if some of your members do not have management skills.
If you know your LLC will have employees, you also know that you will have to pay them. Plus, you will need to figure out the amount you should deduct from their wages for tax purposes. Employees will need to fill out a W-4 Form, and you will need to give them pay stubs with their tax information. Before this all gets overwhelming, keep in mind that we offer Payroll, Tax and HR compliance solutions with our partner, ADP. We make it easy to pay your employees, track time, and file taxes effortlessly. Plus, you and your employees can view and update payroll information via an app--accessible anywhere, anytime, backed by 24/7 live customer service support.
Assign Member Roles
Now it’s the time to decide whether you will run this business on your own or with another member’s or organization’s assistance, how small or large you intend for your team to be, and which duties each member will have.
Decide on a Registered Agent
Next, figure out who the Registered Agent for the LLC should be. The State of Tennessee requires every LLC in the state to have one. This enables the state to ensure the delivery of legal mail and that court documents can be tracked appropriately. The Registered Agent will also act as the contact point between the Tennessee Secretary of State and the LLC. Once you assign someone as your Registered Agent, they can receive official correspondence and documents on behalf of your business.
A Registered Agent can be either an individual who is a resident of Tennessee or a business entity that is authorized to conduct business in the state (but not your own business). This can be you or someone else within your company, but keep in mind that this person will be through whom the state has contact with your business. This agent will receive legal documents (known as “Service of Process”) that pertain to your business. You are legally required to have one.
- Possess a physical street address located in Tennessee (no P.O. Box address).
- Be available during regular business hours, typically Monday through Friday, 9 am to 5 pm.
Although the most comfortable option for a Registered Agent would be to name yourself, a friend, or a family member, know that this information will be public record. Not only will the information be searchable on the state’s LLC website, it can also be republished on other sites as well. If you work from home and would much rather keep your home address private, this might not be the best choice. An alternative you can look into is hiring a Tennessee Registered Agent LLC Service. We also offer a Registered Agent Service for a small charge that you can include as an add-on to your shopping cart.
Decide on a Registered Agent
Next, figure out who the Registered Agent for the LLC should be. The State of Tennessee requires every LLC in the state to have one. This enables the state to ensure the delivery of legal mail and that court documents can be tracked appropriately.
Submit Your Articles
of Organization
While setting up an LLC in Tennessee, you will need to register an LLC in Tennessee by submitting what is called the Articles of Organization to the Secretary of State for Tennessee LLC registration. The form includes information such as the LLC's name and address, the Registered Agent’s information, whether the LLC is run by managers or members, etc. If you also have a Tennessee Limited Liability Operating Agreement form written out, you would include a copy of it with the Articles of Organization in your records. Submitting your Articles of Organization is one of the Tennessee LLC requirements and the Articles of Organization is one of the most important State of Tennessee LLC forms you will need to file.
When filing your Tennessee LLC application, there are usually non-refundable fees that you have to pay with check or money order, additional fees for hand-delivery of Tennessee LLC forms, and long wait times whether in person or by mail--especially if you plan to form an LLC in Tennessee online during peak season. GovDocFiling can speed up the process for you. We can help you form a Tennessee LLC online, offer you expedited pricing, and give you a free business start-up guide and resources with all filings. You can apply here today.
Once your completed Articles of Organization Tennessee LLC form is accepted, congratulations! Your company now exists as a recognized legal entity that is authorized to conduct business within the State of Tennessee.
Submit Your Articles of Organization
While setting up an LLC in Tennessee, you will need to register an LLC in Tennessee by submitting what is called the Articles of Organization to the Secretary of State for Tennessee LLC registration.
Obtain an Employer
Identification Number
One of the Tennessee LLC filing requirements is getting an EIN. Your LLC will need to file with the IRS for an Employer Identification Number (EIN), which is a nine-digit number assigned to businesses for tax filing and reporting purposes that allows the IRS to identify the taxpayer. (Note: you do not need an SSN to apply for an EIN, so international applicants are welcome.) Corporations, partnerships, and LLCs require an EIN, while sole proprietors do not. Instead, sole proprietors can use their Social Security Number, but that is not recommended as that exposes you to potential identity theft/fraud. In any case, it is a good idea to obtain one in case the company grows or for banking purposes.
Fortunately, you do not have to waste time dealing with the IRS on your own. Going through the IRS directly to get your EIN can be complicated, confusing, and frustrating. GovDocFiling alleviates the angst and aggravation of Tennessee business LLC filing with the government, including applying for an EIN, or Tax ID number. Plus, GovDocFiling has one low price for same-day processing and delivery of your EIN (other Tax ID filing services charge more than $300 for same-day service!). Easily apply for your EIN/Tax ID online here. In addition, if you have any questions about obtaining an EIN, we offer 24/7 email and phone support to help you through the process. Emails are answered quickly at info@govdocfiling.com.
Once you designate how you prefer to be taxed, that decision must remain in effect for five years before being changed without approval from the IRS.
Obtain an Employer Identification Number
One of the Tennessee LLC filing requirements is getting an EIN. Your LLC will need to file with the IRS for an Employer Identification Number (EIN), which is a nine-digit number assigned to businesses for tax filing and reporting purposes that allows the IRS to identify the taxpayer.
Fill Out an Operating
Agreement
Once you’ve decided on member roles within your LLC, it is time to create a business contract that holds members to their assigned responsibilities. A Tennessee Operating Agreement orm is a legal document that determines the financial and working relationships among business owners, members, and managers. Member duties would be explained and “what if” scenarios would be covered (such as what happens if a member leaves the LLC). If you do not have an LLC Operating Agreement in Tennessee set up for your business, when something unforeseeable happens, it will be up to the state to decide how to proceed justly, and this may not be what you want.
While it is not one of the Tennessee LLC requirements to have an Operating Agreement, it is still extremely important to have one in order to protect your business.
You can have a lawyer look over your Tennessee LLC Operating Agreement form prior to submitting it. Get the legal advice you need to protect you and familiarize yourself with Tennessee LLC law with our partner Rocket Lawyer.Your company is responsible for maintaining copies of the Operating Agreement.
Fill Out an Operating Agreement
Once you’ve decided on member roles within your LLC, it is time to create a business contract that holds members to their assigned responsibilities. A Tennessee Operating Agreement orm is a legal document that determines the financial and working relationships among business owners, members, and managers.
Familiarize Yourself with the
State’s Taxes and Licenses
Income from pass-through entities, such as a Tennessee Limited Liability Company and Tennessee S corp, “pass through” the business to the owners, who are required to report this information on their personal tax returns. Each individual LLC member will then have to pay taxes on his or her share of the LLC’s income. The LLC itself does not pay federal income taxes, but some states do charge the LLC other various taxes. Tennessee has a personal net income tax rate of 5%. There is also a local gross receipts tax called the Business Tax that applies for all businesses with gross receipts over $10,000. If your business sells products or services, your LLC will also have to pay a sales tax rate of 7%. When coupled with local taxes, the sales tax can go up to 9.47%, making Tennessee currently the state with the highest sales tax.
In addition, Tennessee has a Franchise Tax of $0.25 for each $100 on either your net worth or your real and tangible property in Tennessee--whichever is a bigger amount. The minimum franchise tax is $100. Tennessee has another tax on net earnings, the Excise Tax, which is 6.5%. Both of these taxes affect Tennessee LLCs, corporations, and S corporations. You can view a list of business-related taxes on the Tennessee Department of Revenue website.
Like most other states, Tennessee taxes corporation income, which will apply to you if your LLC is classified as a C corporation. In this case, Tennessee would treat the LLC as a corporation when it comes to taxes. Therefore, if your Tennessee LLC files taxes as a corporation, the company itself must file a separate tax return.
In addition, there may be extra fees for certain insurances, permits, and licenses, depending on the state’s laws and the type of business you own. For example, you may need worker’s compensation, unemployment insurance, building permits, etc. Licenses depending on profession can be found here.
In addition, Tennessee requires a minimal activity license if your taxable sales more than $3,000 but less than $10,000. This license is subject to an annual $15 fee and must be renewed each year. If you business is obligated to pay the Business Tax (it is if your taxable sales are $10,000 or more and if you live in a city that imposes the tax), then you must obtain a standard business license from your local county clerk before proceeding to conduct business. If your business has multiple locations, you must have standard business licenses for each location. This license is subject to an annual $15 fee and must be renewed each year as well. More information on both types of licenses can be found on the Tennessee Department of Revenue website.
Find out the requirements for LLCs in the state you plan to run your business in. Keep in mind that different cities or counties may require certain permits and licenses that other regions do not. For example, if you plan to start an LLC in Nashville, TN, the city of Davidson County has its own requirements which you can see on the Davidson County Clerk website. You can also apply for specific permits for your Nashville LLC on the ">Nashville Government website. Contact your city or county to see if there are any insurances, permits, or licenses you might need to obtain before you begin operating your business.
Familiarize Yourself with the State’s Taxes and Licenses
Income from pass-through entities, such as a Tennessee Limited Liability Company and Tennessee S corp, “pass through” the business to the owners, who are required to report this information on their personal tax returns.
File an Annual Report
Like most states, the State of Tennessee requires all LLC owners to file a report that updates all the information that the Tennessee Secretary of State has on file. This is called an Annual Report and it is due every year by the first day of the fourth month after the close of the fiscal year (usually April 1). When filing your report with the Tennessee Secretary of State, you must include a filing fee of a minimum of $300. The fee is determined by charging each member $50, with a limit of $3000 total. There are additional credit card fees.
Tennessee LLC filing is available online or via printing and mailing the report. Instructions for both methods can be found on the Tennessee Secretary of State website. Filing an Annual Report is necessary for maintaining an active status after starting an LLC in Tennessee. Not filing the report or paying the fee will result in being presented a Tennessee LLC dissolution form, after which the state will dissolve your business.
Annual Reports can be rather complex–requiring the deciphering of gross receipts, dividends, interest, losses, and all Tennessee LLC fees–and you should seek the help of an accountant to ensure that it is filled out properly. Our partner, Bench, will provide you with a team of accountants to help you with your franchise tax reports, as well as general bookkeeping services with monthly financial statements and intuitive software to monitor your business profits and expenses.
File an Annual Report
Like most states, the State of Tennessee requires all LLC owners to file a report that updates all the information that the Tennessee Secretary of State has on file.
Raise Funds for Your LLC
You can’t start a business with zero capital. There are legal fees, the Tennessee LLC filing fee, taxes, employees to pay if you are not an SMLLC, as well as the general Tennessee LLC cost. Some of the most commonly-used options for obtaining funding for your LLC are:
- Personal savings and assets
- Informal loans from family and friends
- Peer-to-peer lending sites or crowdfunding
- Conventional bank loan
- Short-term credit card loans
- Government-sponsored grants/loan programs
- Adding LLC owners
Many new LLC owners begin with their savings to fund their new business venture. If your savings are not enough, you may need to look into liquidating your personal assets or use them as collateral for loans. Can you sell your property or refinance your home? Do you have a retirement account such as a Traditional or Roth IRA? Usually, you can withdraw contributions you made to your IRA anytime, tax- and penalty-free, but that is not always the case. Find out what kind of fees your particular retirement plan will hit you with before using your IRA to fund your business.
Next, look into whether you know someone who shares your passion for your business and has the ability to contribute financially to your dream. These personal connections may want to support your startup idea. Although accepting an informal loan from a close friend or relative may feel safe, you should still protect yourself in case your relationship with the friend or family member goes sour. Have an official contract drawn up that all parties agree to. You can choose to have it notarized and have witnesses present for extra protection.
If you prefer not to borrow from friends and family, you can turn to a peer-to-peer (P2P) or social lending website. A P2P site is a place where investors seek out alternative opportunities to invest outside of stocks and bonds. You can apply for a loan and investors can decide whether or not they wish to fund your proposed business through interest-based loans. You can also look into crowdfunding, which is a way for small businesses or startups to raise money online through donations. These options typically require the ability to promote your business well, ensure complete transparency of where the funds go, and sometimes, the possibility of giving up ownership of a piece of your business. Make sure you look into all of the specifics.
You might be hoping to rely on a conventional loan from a bank, credit union or other lending institution for your main source of funds. In this case, you would need a formal business plan to present during your loan application process. If approved, you would be required to sign a legal contract, or a Promissory Note, outlining your obligations to the lender (which would primarily entail regular payments until the loan is paid off). If you are a first-time business owner, it is likely that you may be rejected initially. In that case, you can improve your application and reapply, or look into alternative sources of funding such as short-term financing via credit cards.
Using a credit card as a means of obtaining a fast and easy business loan would grant you use of immediate funds without the hassle and paperwork of loan applications or business plans. This is the best option for a brand new business, and we work with Nav to give our customers access to the credit they need. Visit our financing page and fill out the form for more information.
There are many credit cards that have low or no annual fees, low introductory interest rates, and other rewards depending on your spending. But be careful: make sure you pay back your credit card before the promotional low interest rate expires and skyrockets, or prior to having to pay large annual fees. And don’t make large purchases that can take years to pay back. For example, getting an equipment loan to purchase a piece of equipment is smarter than putting it on a credit card. Credit cards can be a good temporary solution if your business plan will allow you to pay back the debt quickly.
Another option at your disposal is a government-sponsored grant or loan program. Traditional lenders can turn to federal, state, or local governments to finance their business if such a grant or program is available. Typically, these programs consider sponsoring specific type of businesses or certain business owners, so be sure to research what government-sponsored loan your particular business or you might be eligible for.
Lastly, you can invite new members to your team. If you could see your businesses strategy succeeding with a partner or multiple partners, pool together your financial resources with another member to support your startup. An advantage to this funding option is your partner(s) may come with their own social network of business contacts and possibly even their own potential investors. To protect yourself, you can adjust your State of Tennessee LLC Operating Agreement and ensure that you are still the primary owner of the LLC.
Raise Funds for Your LLC
You can’t start a business with zero capital. There are legal fees, the Tennessee LLC filing fee, taxes, employees to pay if you are not an SMLLC, as well as the general Tennessee LLC cost.
Create a Business Website
Creating a website for your business is not a requirement but it is recommended to any business owner operating in the modern world. An online presence is important to have and maintain in order to ensure that your customers trust your company and know they will receive good customer service. Having a website gives your business legitimacy; your customers will visit your website and see that you are a real company with an actual website where they can read about the company’s origin and products/services and access contact information. Being able to read up on a company on their website leads to trust between a consumer and an organization. Also, dependable customer service is often offered through a website. By offering an email address, a contact form, and/or live chat with a representative on your website, you are making it easy for a customer to get connected with someone knowledgeable about the product/service. That allows a customer to know that there is a real person who cares about their satisfaction within the company that they are doing business with.
Start LLC formationIf the website is outdated or there is no website, a consumer may feel that you are not a legitimate business but a scam with no licenses to back up your business’ operations. You can avoid losing customers due to not having a professional website by ensuring that you have one. We work with GoNorth Websites to provide new businesses with high quality, cost-effective websites. Find out more about our custom designed, written, and developed websites, plus optional internet marketing add-ons that help you grow your business.
But websites needs maintenance too. You can’t simply have one created and never update it throughout the years. Policies and terms change, companies grow, products/services improve, and all of that (and more) can be reflected on the website. This keeps your customers up-to-date and offers a personal touch that is valued by any consumer.
In addition, you can look into having a blog or utilizing social media as another means of keeping your customers in-the-know and offering them a way to interact with your company. An online and/or social media presence can also lead to responsive customers who can offer you feedback on how you’re doing—plus, it’ll help get your company’s name out there.
If this all sounds like more than you’d like to deal with on your own, know that you can hire someone to maintain your website and social media presence for you—just like you can hire customer representatives to handle all correspondence. You can employ a web agency to monitor your website and/or a social media marketing agency to manage your social media campaign. A social media campaign is a coordinated marketing plan that can assist you with your business goals, which translates into extra advertising for your new business.Marketing your company can help you have a more profitable business and can aid you with paying back your business loans quicker—something any business owner aims for. Regardless of industry, all businesses should consider having a website as part of the first steps of starting a business.
T The Benefits of Having an Online Presence
If you’ve decided that you want to have a website for your business, keep a few things in mind. When coming up with a website name, make sure that the domain contains your business name and is easy to type and remember for future visits. If you come up with a great web domain that you’d like to use for your business but you don’t plan to create a business website today, you may want to buy the URL to prevent others from acquiring it.
While brainstorming website URLs for your website, you’re going to either realize that you already know what your business is going to be named or that you have no idea what or how to name your business. Here are a few quick Tennessee LLC name tips:
- Follow LLC naming guidelines. Make sure that the name of your business ends with the phrase “Limited Liability Company” or the abbreviation “LLC.” It’s also important not to use any words or phrases that will make it easy for someone to mistake your company for a federal agency; think “State Department.”
- Find a unique name. If you’re getting an LLC in Tennessee you will need an original name that is not in use by another LLC. To check if a name has already been taken, you can search the Business Name Availability Database.
- Make sure it is available as a web domain. This way, you can find out if another company outside of Tennessee has a business with the same name. In that case, think of something more original.
Create a Business Website
Creating a website for your business is not a requirement but it is recommended to any business owner operating in the modern world.
Begin Operating Your Business
After starting an LLC business in Tennessee, make sure to keep your LLC compliant. To do so, keep track of all important dates, such as those for filing annual documents and license/permit renewals, and pay all necessary TN LLC fees. If you’d rather not do these tasks yourself, you can sign up for a service that will automatically send you alerts ahead of crucial state and federal filing deadlines. Likewise, you can hire an accountant, a tax professional, and/or an attorney to ensure you are not making errors when keeping records, filling out paperwork, and making payments.
You can begin operating your business in Tennessee with peace of mind, knowing that you are protected by an LLC in case anything unforeseeable affects your new business venture.
Begin Operating Your Business
After starting an LLC business in Tennessee, make sure to keep your LLC compliant. To do so, keep track of all important dates, such as those for filing annual documents and license/permit renewals, and pay all necessary TN LLC fees.