We live in a side-hustle, digital economy where a number of women entrepreneurs are juggling a full-time 9-5 p.m. job and a 5-9 p.m. online gig in their evenings. If you’re one of these women, chances are you’re taking on additional work in your free time to build your own brand and business. Whether you’re selling on Etsy or Amazon, working as a virtual assistant or consulting, you are likely a busy boss lady. As your own boss, it’s inevitable you’ll eventually invest more of your time and effort into your side hustle and see it become quite successful. As you begin to take on more clients, more work, and see more income flow into your pocket, it’s time to start looking at forming a limited liability company (LLC) for your business.
If you are worried about how much time and energy it’ll take to form an LLC, you are not alone. We know that understanding how to form a business entity can be daunting when you are your own boss (and perhaps only employee!) because you simply do not have time. You are likely buried in work and stretched thin.
As a smart boss lady, however, it’s important to understand that the benefits of forming an LLC outweigh the effort you might have to put into forming. Some of those benefits include protection in case one of your clients decide to sue you or some type of accident takes place under your watch. LLCs help keep your personal assets separate from your business assets.
And lucky for you, you can form an LLC in one day. How long it will take exactly depends on the complexity of your company and if you decide to file manually or file using an online company formation service. This means that you can set aside a couple hours each night or dedicate a weekend day for this to get done from start to finish.
Here are the seven easy steps to starting an LLC that any busy boss lady can do:
- Select a State and Business Address
- Name your LLC
- Select a Registered Agent
- Decide How to File: Yourself vs. Hiring an Expert
- Obtain and File the Articles of Organization
- Create an Operating Agreement
- Get a Federal Employer Identification Number for your LLC
Each state has different LLC rules and requirements, but these seven are the basic steps we are going to focus on. Let’s break down those steps further and dive into what you need to do for each step.
Step #1 – Select a State and Business Address
Selecting a state is as easy as it sounds. You simply select the state in which you are forming and going to be conducting your business. Get really familiar with your state’s LLC filing rules, regulations, and requirements. Also, check your individual state filing times and state filing fees. Every state is different and you do not want to go through the trouble of accidentally doing something (or not doing something) when it comes to the creation of your LLC. When juggling multiple clients and deadlines as a female entrepreneur, we understand how spending time on unnecessary tasks is a giant waste, so we recommend spending some time to do a little initial research to avoid a costly mistake.
Step #2 – Name Your LLC
This is the fun part! You get to name your company. Pick a name that truly represents your business and what you do. Search your Secretary of State’s business directory to make sure that your company’s name is going to be original and unique. Your LLC cannot have the same name as another LLC in the state in which you are filing. Also, double check to make sure the name you pick complies with your state’s rules. Some states, such as Texas, require that your LLC name must end in one of the following terms or its abbreviations: “Limited Liability Company;” “LLC” or “L.L.C.;” “Limited Company;” “LC” or “L.C.”
Step #3 – Select a Registered Agent
A registered agent is the person responsible for receiving all legal documents for your LLC. So that person can be you, a family member, team member, a lawyer, or anyone of your choosing. Just make sure this is a person you trust. The registered agent also needs to have an address in the state you are filing your business in.
Step #4 – Decide How to File – Filing Yourself vs Hiring an Expert
Once you gather that information and have your fabulous business plans all established, the next thing you need to do is decide how to file for your LLC. One option is you can hire a company formation expert, which can alleviate some of the workload for you. This expert can assist you with the agreements, suggest solutions, and ensure no laws are being violated. Hiring someone can be expensive howevr, which means you may want to consider filing yourself if budget is a factor. You can file for yourself by using a trusted online filing website. This allows you to have complete control over the filing and creation of your LLC, which is something you may want. Online filing companies can also walk you through the process and ensure you are completing everything you need and picking the right package for your business. If any part of these LLC filing steps sound daunting or confusing, we definitely recommend this option to save you time and money. IncFile can help you quickly and easily file as an LLC — and we even offer a year of free registered agent service.
Step #5 – Obtain and File the Articles of Organization
This part sounds a little bit tricky, but stay with me here. In order to create your LLC, you need to obtain a copy of your state’s LLC Articles of Organization form. You can get this form from your state’s secretary of state office. The form itself should be pretty self-explanatory. It will require you to list the business name, statement of the business purpose, business address, registered agent information, and the initial members of the company. Once completed, you file the articles with your secretary of state’s office. There will be initial filing fees, annual filing fees, and annual reporting requirements that you need to be aware of and will be responsible for, based on your state.
Step #6 – Create an Operating Agreement
Your operating agreement will have your back in case anything unexpected happens and lays down the law of your business’s internal operations. These handy agreements are not filed with the state and usually are kept confidential. Adopting an operating agreement can protect members from personal liability in connection with the LLC. This means that if for some reason your LLC is being sued, your personal assets are protected and separate from your business assets.
Step #7 – Get a Federal Employer Identification Number for Your LLC
The final step is to get a Federal Employer Identification Number (FEIN or EIN). This number is important since your LLC is a legal entity, federal law requires you to obtain one. You obtain an EIN by filling out Form SS-4 – Application for Employer Identification Number and can do this online. Once you get your EIN, keep it handy. You will need it for things such as opening a bank account for your business.
And just like that you are finished creating your LLC! Congrats!
Need Some More Help?
Although creating an LLC can be quick and easy, it does not mean that if you file for an LLC yourself that you will understand every part of the process or have the time to do it all. If you find yourself needing additional help or would like to file your LLC in a couple hours or less, go to IncFile. There you will receive assistance each step of the way to ensure you are forming your LLC properly.
Latest posts by Lisa Crocco (see all)
- Poll Results: Biggest Challenge Small Businesses Face - June 8, 2018
- What States Allow Electronic Business Signatures? - May 24, 2018
- Everything You Get with Incfile’s Platinum Package - April 27, 2018