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How to Set Up an LLC? — Procedures and Requirements To Comply With (2024)

Many businesses have been opting to form Limited Liability Companies for their enticing advantages and benefits. With an LLC, businesses are ensured of smooth and protected operations. However, setting up this type of company isn’t an easy task, so in this article, our experts will give you all the pertinent details on how to setup an LLC. 

How to Set Up an LLC

What is an LLC?

Before going into detail on how to start an LLC, you must understand what an LLC is first. An LLC is an acronym for “Limited Liability Company,” a unique legal entity or type of business structure that free members from any personal liabilities incurred with its liability protection. LLCs can protect your personal assets and increase your business’s credibility.

Most small LLCs are managed directly by their members, but LLC may appoint one or more people (outsiders) to managed the LLCs – similar to how a corporation’s board of directors oversees it. Managers vote on major decisions such as taking out a loan, buying real estate, or changing strategic plans. This kind of business structure features a corporation, sole proprietorship, and a partnership.

Members have limited personal liability, and more than one person often runs an LLC. Besides, LLCs are usually cheaper to managed, form, and run. LLC is a business structure that has good benefits.

Steps in Setting up an LLC

To start an LLC, forming your Limited Liability Company, you would have to undergo several procedures. You can hire high-caliber LLC Formation Service company to assist you with the entire process and other requirements. However, that’s not to say that you cannot arrange everything yourself and cut the fee costs. To help you forming an LLC Limited Liability as efficiently as possible, below is a step-by-step guide for owners / management or LLC members:

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Select a State

Select your state for a new business. This is the first step and one of the most important parts of your business, to start an LLC. All fifty states in the United States of America allow you to form an LLC by filing formation documents. This can be provided by a selected LLC organizer, as well. However, each state has different guiding rules and state law on how your business will run. When you’re selecting states, you want to consider the following:

  •  Taxes: As an LLC business owner, you may be required to pay your (income) tax at one point or the other. However, if you’re not very careful, this taxed could become overwhelming and many small business owners have suffered from this tax predicament.

    An LLC is a pass-through business entity for federal income tax purposes, so the profits and losses from the LLC are “passed through” to you and the members. and That means it does not have to pay federal tax. But if it is to your LLC’s advantage to be taxed as a corporations, you have that option. You can file Form 8832 “Entity Classification Election” with the Treasury Department, and your LLC will be taxed as a corporation under Subchapter – C  Corporations.

    Thus, always consider tax laws before deciding on a state. Some states like Delaware will only charge small business owners very low tax rates each year. Others, like Wyoming, will hardly charge small business owners anything at all. Make your considerations properly because choosing where to form an LLC.

Filing Requirements
  •  Business friendliness and viability: Even if the tax rates are cheap with an easy-to-compile annual report, you shouldn’t jump right into it to form an LLC. Check out how business-friendly the state is for LLCs/small businesses. Our experts suggest studying the customer demographic and employment rates. Suppose your market is not being able to afford your products well enough to keep you in business. Eventually, your profits and losses will be negatively imbalanced in the state.

Therefore, you should know that starting a business as an LLCs in your home state is one of the easiest choices you can make. However, if you’ll be operating a business in other states, you’ll need to get through a foreign registration with different state law of your LLC in the state you’re moving to start your business in other states.

Come Up with a Business Name

Your business name is one of the most important parts of your brand. It defines you and helps your customers to identify you in an ocean of businesses across your state and country. Above all else, you need to register it. Name your LLC/ business a unique one. If your company/ LLC name is the same or even similar to someone else’s, you could get into several issues. Starting an LLC name, it is a good idea to confirm the uniqueness of your name on your state’s website.  Some states require you to also check for business reserved names. Apart from that, you also must remember the following when you want to choose a name:

  • Your company name should be easy to spell and remember. That way, people can easily find you on the internet.
  • Your company name should be meaningful. In addition, it should be able to transcend your current services. That way, even if you expand, it’ll still be relevant and useful.

Articles of Organization

LLC articles of organization are legal documents that are alternately known as a Certificate of Organization or a Certificate of Formation. It establishes your business at the state level. Apart from that, it defines the rights, duties, liabilities, and obligations of each LLC member within your organization. To form this kind of business structure, you need to prepare these articles. Later, you can turn them into your Secretary of State alongside your state filing fees while forming an LLC.

(Company documents are critical in managing a business, thus, understanding how you can properly safeguard your corporate record is a crucial task of every entity)

article of organization

Choose a Registered Agent

Every LLC in the United States must have a designated registered agent, a registered service provider. Many states require a registered agent or individual or organization that will be responsible for receiving your government/legal formation documents, service of process, etc. A great registered agent must provide a significant in facilitating communication between you and the government to form your LLC.

They also maintain your privacy by handling mails and in ensuring you don’t miss any important legal matters. There are several registered agent service providers across the country but you must choose one that functions in your state.

File Your LLC

After establishing everything above in order, you must file or register your LLC with the Secretary of State. As potential LLC owners, you can form your LLC by submitting your articles of organization to your state government. The entire procedure usually costs a state filing fee of about $100, regardless of the state you wish to file in.


Draft an Operating Agreement

What is an LLC operating agreement? The Limited Liability Company is an operating agreement that is a special document that clearly defines how you will run your business. It also details the rights and responsibilities of every member of your business. You can create an LLC operating agreement yourself or outsource it to an LLC service business. Either way, it will help you:

  • Outline your organizational structure
  • Define how to dissolve the business
  • Determine the capital distribution mode among the owners
  • Address the management structure
  • Explain the process or changing members at any point

Other Requirements

The above are the major things you’ll have to handle if you decide to form or create an LLC. However, there are a few other things our experts believe that you may want to get. They include:

  • Employer Identification Number (EIN): The EIN is a 9-digit number assigned to you by the IRS. You need to register and get an EIN, Employee Identification Number because it will be useful to file your legal LLC/corporation federal tax returns/accounts.
  • Business Bank account: If you’ll be setting up an LLC/corporation, it goes without saying that you’ll need a business bank account.
  • An attorney: This isn’t compulsory, should you need legal help you could get an LLC attorney to help you with the formation process. However, it won’t be free.
To help you set up an LLC, hiring the services of Rockect Lawyer LLC formation company is a great choice. 

Advantages of Establishing an LLC

LLCs offer numerous advantages in comparison to their counterparts. A few of them include:

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  • Flexibility: LLCs allow you a significant amount of flexibility with which you can run your business. For example, there’s no limit to the number of members you’re allowed to include.
  • Simplicity: LLC operation is simple and straightforward. Unlike other business forms, you don’t need to have multiple shareholder or board of director meetings. Everyone knows their responsibility from the  LLC operating agreement.
  • Limited Liability Protection: Any business debt when incurs the owner’s not personally responsible, and cannot be taken dues out from personal assets.
If you are decided on building an LLC, particularly on real estate, here are our top states to establish LLC for real estate

Important Reminders

When you’re setting up an LLC, our experts advise that you remember the following. First, your preferred state should be as business-friendly as possible, as we previously mentioned earlier. In addition, you cannot afford to leave your trademark unprotected after choosing a business name [1]. Finally, make sure that you acquire appropriate business licenses. If you’re running a pharmacy, for example, you cannot simply stop at acquiring articles of organization. You need to go a step further and get your required license of operations. 

Starting up an LLC is a long process, as well as dissolving it. You can check our page on how you can dissolve a corporation in the state of Illinois here


Do I need a lawyer to set up an LLC?

You don’t need a lawyer in creating an LLC. However, they could come in useful at different points for your business. An example is when you’re trying to sort out issues relating to taxes.

How much do you need to start an LLC?

You don’t need so much money to start up an LLC. If you’re going solo, you may only have to pay a few filing fees outside your state filing fee and registered agent subscription. If you use an LLC service company, your fees may depend on the services you’re asking for.

If you are planning to start a business in Illinois, this is how you start a single proprietorship business in Illinois


Forming or setting up a Limited Liability Company (LLC) entails a great deal of work. However, it may be more difficult if you are not well-versed with the entirety of the process. In this guide, our experts have given intricate details on how to setup an LLC. All that’s left now is for your company to take that first step of establishing a legal or separate entity.

Fond of supporting religious groups and educational causes? Then, knowing the key advantages and disadvantages of a non-profit organization is a worthy read for you! 

Charles McMillan
Charles McMillan
Charles is a family man, an entrepreneur, and a writer. He is skilled in finding the balance between efficiency, affordability, and high-quality offerings when it comes to business services. He’s on a continuing mission to discover and rediscover the most popular LLC services, while sharing his most accurate assessment and review to help business owners like himself.