Form an LLC

by Bethany K. Laurence, J.D.

Take these steps to form a limited liability company, or LLC.

1. Choose a name.
 The name of your business cannot be the same as the name of another limited liability company (LLC) on file with your state's LLC office (which is usually part of the same division as corporations, often the Secretary of State's office). The name must end with an LLC designator, such as "Limited Liability Company" or "Limited Company," or an abbreviation of one of these phrases ("LLC," "L.L.C.," or "Ltd. Liability Co."). 

Your state's LLC office can tell you how to check if your proposed name is available for your use. For a small fee, you can usually reserve your LLC name until you file your articles of organization. For more information, contact your state’s LLC office or see Choosing a Business Name FAQ.

2. File articles of organization.
Prepare and file "articles of organization" with your state's LLC filing office.  Typically, you must provide only your LLC's name, its address, and sometimes the names of all of the owners -- called members.

Some states (including Delaware, Mississippi, New Hampshire, New Jersey, and Washington) use the term "certificate of formation" instead. Two other states (Massachusetts and Pennsylvania) call the document a "certificate of organization." For help filing this document, see Form Your Own Limited Liability Company, by Anthony Mancuso (Nolo) or Nolo's software LLC Maker. Or, to form your LLC online right now, use our online LLC formation service.

3. Create an LLC operating agreement.
The LLC operating agreement contains rules for the ownership and operation of the business (much like a partnership agreement or corporate bylaws). A typical operating agreement includes the members' percentage interests in the business, the members' rights and responsibilities, and information on voting, management, and profits and losses. For more on LLC operating agreements, read Creating an LLC Operating Agreement.