How to Form an LLC

An LLC, or Limited Liability Company, is probably the most popular company entity that small businesses form to start their businesses.  There are a number of companies that advertise their services to help you incorporate, or form an LLC.  A number of these companies do quite a bit of advertising on the radio and TV.  But the truth is, that you can form an LLC fairly easily and on your own, and avoid paying those third party fees.  Those companies (such as Legal Zoom etc.) that advertise their services may say they only charge you $200 or so to form the LLC, but that is just THEIR fee, not the states fee, which must also be paid!  So the easiest way, and most affordable, is to do it yourself, directly through your Secretary of State.

 In order to create your LLC, you’ll want to contact your states Secretary of State (SOS), which you can easily do online.  BEWARE!  If you do a search for Secretary of State, you will see many websites that try to be CLOSE to the SOS’s website.  Make sure it is the state’s actual SOS website.  You can complete the forms online for your LLC.  The info needed is very simple.  Company name, manager, address, etc.  You will need to use either your home address or office address, as you do not want to use a PO box.

 Assuming it will be a single member LLC ( no partners…partners stink anyway!) you will be the Managing Member of the LLC.  If you decide to have partners (I STRONGLY suggest not to!) they will be Members of the LLC.

 You will need a registered agent.  One of the mistakes people make is to call themselves the registered agent.  The registered agent is the person that would receive documents from the comptroller, or even a lawsuit.  You want to find a 3rd party registered agent.  A simple search can find a registered agent service.  In Texas, I recommend Lawyer’s Aid Service.

There you go!  You will then get confirmation in the mail, and you will likely start getting all kinds of junk mail and solicitation in the mail as well addressed to your company.  Some companies stalk the SOS for new corporations and LLC’s to send them stuff for mailing labels, credit card solicitations etc.

 The next step is to go to the IRS website and get your EIN number.  You can actually do this over the phone as well. VERY easy.  The EIN number is the Employer Identification Number, which is used on the tax stuff, open bank accounts etc.