For a quick look at the steps necessary to form an LLC, see Nolo's How to Form an LLC.
For an in-depth look at Nolo's online formation process, go to Nolo's online LLC page and choose your state. Click Get Started and you will be taken to your state LLC page, which contains information on the LLC process.
Each state has different processing times. To find out your state's processing time, go to Nolo's Online LLC FAQs page and choose your state. In the event that the Secretary of State is experiencing delays, times may be longer.
Here you'll find some state filing offices' web pages where you can check if your LLC has been formed: California, Colorado, Florida, Massachusetts, Missouri, Washington, Wisconsin. You may call the Texas Secretary of State at (512) 463-5555.
You'll receive your articles of organization (also known as a certificate of organization or a certification of formation in some states) when the state filing office has finished processing your paperwork.
If you opted to have Nolo prepare your IRS Form SS-4, Application for Employer Identification Number (EIN), Nolo sends you a pre-populated form with your final LLC package to sign and mail or fax to the IRS to obtain your EIN. You can also choose to apply for an EIN online on the IRS website, using the pre-populated SS-4 form as reference.
To read more about whether your LLC needs to obtain an EIN, please read Nolo's article Does My Business Need an Employer Identification Number?
Some banks require you to have your articles of organization (or certificate of formation or certificate of organization) in hand before you can open a bank account. However, if you have found your LLC name on your Secretary of State's website with your name attached to the filing, while you are waiting for your final LLC documents to arrive, you can start creating business cards, signs, and promotional material using your new LLC name.
See Nolo.com's section on Licenses & Permits for Your Business.
The IRS treats sole proprietors and single-member LLCs as "disregarded entities for tax purposes." This means that the IRS classifies an LLC with only one member as an entity "disregarded as separate from its owner," for income tax purposes. The single owner reports income as part of the owner's personal tax return. Unless you indicated that you plan to have your single-member LLC be classified as a corporation for tax purposes, your operating agreement will state that it should be classified as a disregarded entity. For more on disregarded entity classification, visit the IRS web page on single-member LLCs and disregarded entities.
A professional limited liability company (PLLC) is an LLC that is formed to carry out a service or function that requires a license from a public licensing authority. This includes the personal services of an attorney, architect, certified public accountant, dentist, doctor, podiatrist, nurse, psychologist, massage therapist, family therapist, or insurance agent. This does not include workers with commercial drivers licenses.
Only some states have professional limited liability companies. In other states, professionals may be allowed to perform services through a regular LLC. In at least one state, California, professionals aren't allowed to perform services through either an LLC or a PLLC.
Your LLC's registered agent is sometimes called the "agent for service of process" or a "resident agent" and is authorized to receive legal papers on behalf of the LLC. Legal documents will be sent by the Secretary of State to the registered agent's address. (For New York entities, the Secretary of State is designated as the registered agent, and you will need to maintain a service of process address where the Secretary of State can send correspondence.)
You should be aware of the potential tax implications of basing ownership percentages on services contributed to the LLC. If you intend to contribute services in exchange for your membership, you'll need to record the value of those services on your company's balance sheet. In turn, you'll need to pay taxes on the value of those services, just as if you'd been paid for them as an employee.
The IRS advises users to leave a space where there is a punctuation mark that is not a hyphen (-) or ampersand (&) when entering your LLC's name in the online EIN application.
Here's a Nolo article with more information on Registering Your Business Name.
The U.S. Small Business Administration's website also provides information on Business Name Registration.
You may use one LLC for more than one line of business, but the articles of organization will list one official LLC name. The LLC could then either operate both businesses directly under the official LLC name or file two different trade names with the state or county, depending on what state you live in (trade names are called assumed names, fictitious business names, or doing business as (DBA) names). A lawyer can advise you as to whether using two separate trade names makes sense for you. If you do use two trade names, it's a good idea to keep the LLC suffix in your trade names.
Nolo's book, Your Limited Liability Company: An Operating Manual, includes the following form: "Appointment of LLC Officers." The text of this form can be pasted into either the "Written Consent to Action without Meeting" form or the "Minutes of LLC Meeting" form.
Most LLCs are required to have their tax year follow the calendar year—meaning their tax year runs from January 1 through December 31. (To choose this option, select "December" as the end of your LLC's tax year in Nolo's Online LLC filing interview.)
If you can prove that your business has a natural business year that is different from the calendar year, you may be able to adopt a different tax year (called a fiscal year). The rules in this area are complicated—if you would like to adopt a fiscal year, consult an accountant to see if your LLC qualifies.
Converting a Sole Proprietorship
We can help you convert a business that you currently own and operate only if it is a sole proprietorship, and only if you will be the sole member (owner) of your LLC at the outset. If you are trying to convert your sole proprietorship into a multi-member LLC, you should consult an attorney. There are some legal and tax ramifications to closing down an existing business and starting a new one that are beyond the scope of our service. Our website features an online lawyer directory as a free resource to our customers. Comprehensive profiles of attorneys in your state can be found at www.nolo.com/lawyers/business.
Converting a Partnership or Corporation
If you are trying to convert a corporation or partnership into an LLC, you should consult an attorney. There are some legal and tax ramifications to closing down an existing business and starting a new one that are beyond the scope of our service. Our website features an online lawyer directory as a free resource to our customers. Comprehensive profiles of attorneys in your state can be found in Nolo's Lawyer Directory.
If you are converting a sole proprietorship to an LLC and you don't plan on hiring employees, in most states, you do not need to apply for an EIN. If you were using your Social Security number to report income from your sole proprietorship, you can continue to use it to report income from your LLC, for as long as you don't have employees. If you wish, however, you can request an EIN in this situation. Some states do require businesses to have a federal EIN in order to get a sales tax permit.
If you already had an EIN for your sole proprietorship, you can use that one for your LLC, for as long as your LLC does not have employees. If you hire employees, you'll need to apply for another EIN.
Nolo's operating agreement does not provide for the specific language requirements of a self-directed IRA LLC. We suggest you consult with an attorney for this task. Nolo's Lawyer Directory can help you find a local attorney that practices in the area of business entity formation.
No. While our Express Premiere Online LLC Formation packages do include a corporate kit, we do not offer this product separately for purchase.
You must pay an annual LLC tax to California's Franchise Tax Board (FTB) within approximately 3-1/2 months of formation. That tax is $800 per year. After the year of formation, the tax is due by April 15 each year, assuming your LLC has a calendar tax year. This tax must be sent to the Franchise Tax Board with FTB Form 3522, Limited Liability Company Tax Voucher, available at http://ftb.ca.gov.
In addition, if your LLC's net annual income exceeds $250,000, you may be required to pay an additional "fee" with your annual tax return, Form 568, Limited Liability Company Return of Income. Like individual tax returns, your LLC tax return is due by April 15 of each year (assuming a calendar tax year). You can find Form 568 on the Franchise Tax Board's website at http://ftb.ca.gov.
For instance, if you form an LLC on August 1, 2020, the minimum franchise tax will be due for your first tax year by November 15. You will owe the next $800 minimum franchise tax by April 15, 2021, for your second tax year (January 1, 2021 to December 31, 2021).
(Special rule for very short tax years: If you create your LLC on or after December 17, 2020, and you don't do any business until January 1, 2021, those two weeks won't count as a tax year.)
Your LLC can pay the $800 annual tax to the California Franchise Tax Board by submitting FTB Form 3522, Limited Liability Company Tax Voucher, available at the California Franchise Tax Board website, or by paying online at the same page.
Nolo cannot offer legal nor tax advice. Visit the California Franchise Tax Board's LLC page for more information on the annual tax.
Within 120 days of formation, your LLC must publish a notice containing the information in your articles of organization in two newspapers and submit a Certificate of Publication to the Department of State. In New York, the legal notice must run in the newspapers for six weeks. It takes about three months for the entire process, including filing with the Department of State. If you neglect to comply with the publication requirement, you will be subject to a penalty from the Department of State.
If you wish, when you form an LLC with Nolo, our partner Vcorp Services will prepare the legal notice, contact the specific newspapers that meet the unique requirements of each county, publish the notices for the required number of weeks, and submit a Certificate of Publication to the Department of State.
Vcorp Services will contact you to collect payment for its publication service. The fees vary by county. For more information on the requirement and associated fees, visit Vcorp's publication service page.
The Department of State will send your certified copy in approximately three to four weeks. If you need a certified copy before then, you may order an expedited copy by fax. See www.dos.ny.gov/corps/faq_copies.page.asp for more information, and find the "Credit Card/Debit Card Authorization" form here. There is a cost for the certified copy and expedited service.
If the LLC was formed before January 1 of the current year, the customer can make certain changes to the annual report (due May 1 of each year).
If the LLC was formed within the current year, the Articles of Amendment to the Articles of Organization must be filed. The form can be found here.
The Texas Secretary of State advises that it is not necessary to update your Certificate of Formation due to a change in members. If you wish, you may file a Certificate of Amendment on Form 424, found on the Secretary of State's website. This form does require a filing fee.
It is, however, mandatory to report any change to the registered agent's name or address.
You can find information on amending your operating agreement to add new members from our book Your Limited Liability Company: An Operating Manual.
If you would like to update your LLC name with the Secretary of State, you can do so by submitting a Certificate of Amendment to the Articles of Organization. Information is available on the Secretary of State's website.