You’re at your kitchen table, surrounded by a half-empty coffee mug and a laptop covered in sticky notes that say things like “Become CEO of naptime” and “Monetize chaos.” Your dog is side-eyeing your third snack break.
Welcome to the glamorous pre-launch phase of your LLC! Forming an LLC isn’t just about being the boss; it’s about strategic planning and taking proactive steps to protect yourself and your interests.
If you’re ready to turn your “I’ll figure it out” energy into a legit empire by finally registering a limited liability company, here are the six key steps to getting it right.
1. Name Your LLC Like It’s Your Firstborn (But Less Pressure)
Your LLC’s name is its first handshake with the world. It should resonate with your brand’s soul while complying with state rules. In Texas, for example, the registered name must include “LLC” or “Limited Liability Company” and avoid restricted words like “Bank” or “University” without proper licensing.
But before you fall in love with a name, check its availability. Search your state’s business registry (like the Texas Secretary of State’s website) to ensure you have a unique name.
Pro tip: Secure a matching domain name early. It pays to claim this valuable piece of digital real estate as early as possible.
2. File Your Formation Docs: The Business Equivalent of a Birth Certificate
Next, submit your Certificate of Formation (known as “Articles of Organization” in many states). This legal document formally registers your LLC with the state.
In Texas, you will file it online or by mail and pay a $300 filing fee. To file your submission, you will need the following details:
- The name and address of your LLC.
- The contact information of a registered agent – this is your LLC’s official contact person. You can act as one yourself or hire a professional service.
- Management structure (i.e., member-managed vs. manager-managed).
3. Draft an Operating Agreement: The Business equivalent of a Prenup
While Texas doesn’t have an operating agreement requirement, this document is essentially the rulebook for your LLC because it outlines:
- Ownership percentages
- Voting rights and decision-making processes
- Profit/loss distribution
- Procedures for adding/removing members
It’s your game plan for settling disputes and establishing your LLC’s legality in court. Fortunately, you can customize an operating agreement for LLCs in Texas to meet your state’s requirements.
4. Licenses, Permits, & EINs: The Boring Stuff That Keeps You Out of Jail
Depending on the kind of business you want to establish under the LLC, you might need:
- General business license: This is a legal requirement in some states and cities, but check local regulations and requirements.
- Professional licenses: These are especially for entrepreneurs eager to venture into healthcare, real estate, or cosmetology.
- Sales tax permit: This permit applies to businesses that sell taxable goods/services.
Then, register for an Employer Identification Number (EIN) from the IRS. It’s free, takes 10 minutes online, and lets you open a business bank account – so you can finally stop Venmo-ing yourself “for supplies.”
5. Separate Your $$$: Because Mixing Funds is Like Sharing a Toothbrush
An LLC is not a personal piggy bank. That’s why you should get a business bank account, pronto! This way, you can keep personal and business finances separate from day one.
Open a business bank account and a business-only credit card for clean expense tracking. Use accounting software tools like QuickBooks or FreshBooks to track cash flow, invoices, and tax liabilities.
Also, get insurance. General liability insurance covers lawsuits like “My coffee was too hot!” Workers’ compensation insurance is a legal requirement in most states if you intend to hire employees, even if the employee is your cousin Dave.
6. Stay Compliant: The “Flossing” of Business Ownership
Launching your LLC is like adopting a Tamagotchi: if you neglect it, it’ll die. Staying compliant is one way to take care of your LLC. You can stay compliant by:
- Filing annual reports (Texas lets you skip this, but other states won’t)
- Paying franchise taxes (if you earn over $1.23 million, congrats, but remember to pay Uncle Sam)
- Renewing licenses (set calendar reminders or suffer the wrath of expired permits)
Bookmark the U.S. Small Business Administration for checklists. Follow the above compliance steps to remain in good standing with Uncle Sam.
Conclusion: Your Empire Awaits
Let’s be real: Launching an LLC is equally thrilling and terrifying. But remember this: every Fortune 500 company started with a single form and a fearless founder. So, be fearless and use these simple steps to register your LLC and start your empire! Viva!
