Women of Color as Inventors, Innovators,
Entrepreneurs and Business Leaders

How to Open a USA LLC

The limited liability company is a relatively new kind of legal business entity compared to corporations and partnerships. Entrepreneurs often prefer a United States LLC because it provides legal protection against personal liability not afforded to traditional partnerships. Every state in the United States allows entrepreneurs to open an LLC. Each state has its own LLC laws and filing procedures. Entrepreneurs can open an LLC in any state by finding out the state agency that regulates LLC companies and filing organization forms with that state government agency.

Step 1:
Click on the "Register a Business" link on the home page of the Business.gov website. On the next page, click on the "Register a Business Entity/Incorporate" link to get to the "Business Incorporation" page. The U.S. Small Business Administration provides this list of state links to assist business owners opening a new business. You must select an individual state to start an LLC in the U.S. Each state has a particular government agency for registering corporations and limited liability companies. Click on the state where you would like to open your LLC to find the website of the agency that registers business entities at the statewide level.

Step 2:
Look around the state's website to find the form for registering an LLC in that state. Whereas businesses starting a corporation generally use an "Articles of Incorporation" form, you generally need to find an "Articles of Organization" form to file an LLC. Some states have a "Certificate of Formation" form or use a similar phrase.

Step 3:
Fill out the form for your chosen state to register an LLC. Each state has its own set of laws for governing LLC rights and duties. You may wish to have a local business attorney assist in completing or at least reviewing the document before submitting it to the state.

Step 4:
Submit the LLC filing form and required fee. Each state has its own fee for registering a limited liability company. States generally charge about $100, but states like Texas charge as much as $300 to register an LLC.

Notes: Members of an LLC may also create an operating agreement. This optional agreement exists independently of the articles of organization and need not be filed with any state agency. An operating agreement contains rules that the members agree to follow when managing the company. The LLC should keep a copy of any operating agreement at the LLC's registered place of business.

Some states have an additional professional limited liability company. Doctors and other licensed professionals may have to open a PLLC instead of a normal LLC under the laws of certain states. You can get the filing forms from the same agency that supplies standard LLC formation documents.

Some states require an annual report and accompanying fee to keep active status for your LLC. Other states might charge a franchise fee or other regular fee to limited liability companies. You should consider these additional fees when deciding whether to open an LLC. Although an LLC has substantial legal protections, it costs more to maintain than sole proprietorships and partnerships, which generally have no annual fees to maintain.

Conclusion:
Depending on the state where you file and how much business your company makes, an LLC can provide important legal protection against personal liability with the added tax benefits of a partnership. You should look at your company's personal situation and then file an LLC for these legal benefits if your personal company qualifies under state LLC law.

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