One of the first decisions you'll make when starting your business is choosing the right legal structure for your company. Among the various options, a Limited Liability Company (LLC) is a popular choice for many entrepreneurs.

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However, the process of forming an LLC can be complex. It involves several steps and you may need the help of experts to manage challenging aspects of your business operations so that you can focus on growing your business.

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In this guide, we'll walk you through how to apply for an LLC, including how Hirechore can streamline your LLC operations.

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What Is an LLC?

An LLC is a legal entity that separates the business's liabilities and obligations from those of its owners, known as members. This separation means that members are not personally responsible for the company's debts or legal liabilities, thus protecting their assets.

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In addition, LLCs benefit from pass-through taxation, where profits and losses are reported on the individual member's tax returns, thereby avoiding the double taxation often associated with corporations.

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The benefits of forming an LLC include:

• Personal Liability Protection: Members are protected from personal responsibility for business debts and legal actions, thereby protecting personal assets like homes and savings.
• Tax Advantages: With pass-through taxation, LLCs avoid corporate income tax, and profits are taxed only once at the individual level.
• Operational Flexibility: LLCs are not bound by the strict operational requirements of corporations, allowing for more adaptable management structures and fewer formalities.
• Credibility and Professionalism: Operating as an LLC can enhance a business's credibility with customers, suppliers, and potential investors.
• Ease of Formation and Maintenance: Compared to corporations, LLCs are easier and less costly to establish and maintain, with fewer compliance requirements.

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Step-by-Step Guide to Forming an LLC

#1 Choose a Unique Business Name

The first step in forming an LLC is choosing a legally compliant name. Here's how to ensure your business name meets state requirements and safeguards your brand identity:

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Ensure Uniqueness and Compliance

Your LLC name must be distinguishable from existing businesses registered in your state. This means it cannot be identical or deceptively similar to another entity's name.

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Most states require that your LLC name includes a designator such as "Limited Liability Company," "LLC," or "L.L.C." to indicate its legal structure.

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In addition, certain words are restricted or prohibited in LLC names. Terms like "bank," "insurance," or "university" may require additional approvals or be reserved for certain types of businesses.

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Conduct a State Business Name Search

Before settling on a name, search your state's Secretary of State website or business registry to ensure the desired name is available. This step helps prevent potential legal issues and ensures your LLC name is unique within your state.

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Perform a Trademark Search

Even if your chosen name is available at the state level, it may still infringe on existing trademarks.

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Search using the U.S. Patent and Trademark Office's (USPTO) Trademark Electronic Search System (TESS) to check for registered trademarks identical or similar to your proposed name.

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This step helps avoid potential legal disputes and ensures the nationwide protection of your brand.

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Consider Domain Name Availability

A matching domain name is important for your online presence. Check the availability of your desired domain name to ensure consistency across your branding and to make it easier for customers to find you online.

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#2 Appoint a Registered Agent

A registered agent (also known as a statutory agent) serves as your business's official point of contact for receiving legal documents, tax notices, and government correspondence.

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They must have a physical address in the state where your business is registered and be available during standard business hours. This role ensures your business promptly receives important legal and tax documents.

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Options for Appointing a Registered Agent

You can explore two options when choosing a registered agent:

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Acting as Your Registered Agent

You can serve as your registered agent if you have a physical address in the state of formation and are available during business hours. This option can save money but may compromise your privacy, as your address becomes part of the public record.

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Hiring a Professional Registered Agent Service

Professional services offer several benefits, including:

• Privacy Protection: Your address remains confidential.
• Compliance Assistance: They help ensure you don't miss important deadlines or documents.
• Flexibility: You won't need to be present at a specific location during business hours.
• Multi-State Coverage: Ideal if your business operates in multiple states.

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#3 File Articles of Organization

Articles of Organization (sometimes referred to as a Certificate of Formation or Certificate of Organization) officially register your business with the state, granting it legal recognition.

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Follow the steps below to file Articles of Organization:

• Before filing, ensure you have the necessary details, including your LLC's name, principal address, purpose, duration, and the names and addresses of members or managers.
• Appoint a registered agent who will receive legal documents on behalf of your LLC. This can be an individual or a service authorized to operate in your state.
• Obtain the Articles of Organization form from your state's Secretary of State website or office. Fill it out accurately, providing all required information.
• File the completed form with the appropriate state agency, typically the Secretary of State. Submission methods may include online filing, mail, or in-person delivery, depending on your state's procedures.
• Filing fees vary by state. For instance, as of 2025, fees range from $50 in states like Arizona and Arkansas to $520 in Massachusetts. Check your specific state's fee schedule to ensure accurate payment.
• After submission, the state will process your filing. Once approved, you'll receive a confirmation, such as a stamped copy of the Articles of Organization or a certificate of formation, signifying your LLC's official status.

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#4 Create an Operating Agreement

An LLC Operating Agreement outlines the ownership structure, member roles, and operational procedures of your Limited Liability Company. While not mandated in every state, having a well-written Operating Agreement ensures your business operates smoothly while offering legal protection.

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Here are why you must have an Operating Agreement:

• An Operating Agreement minimizes misunderstandings and conflicts among members by clearly defining roles, responsibilities, and procedures.
• In the absence of an Operating Agreement, your LLC is subject to your state's default rules, which may not align with your business's specific needs or goals.
• A well-documented Operating Agreement reinforces the separation between personal and business assets, safeguarding members' limited liability protections.
• It establishes clear guidelines for transferring ownership interests, handling member departures, or dissolving the LLC, ensuring business continuity.

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Even if your state doesn't require an Operating Agreement, create one to solidify your LLC's structure and protect its members. Consult with legal professionals to tailor the agreement to your specific business needs.

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#5 Obtain an Employer Identification Number (EIN)

An EIN, also known as a Federal Tax Identification Number, is used by the Internal Revenue Service (IRS) to identify your business for tax purposes.

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You can use an EIN for the following business activities:

• Filing federal and state taxes
• Managing payroll and employment taxes
• Separating personal and business finances
• Complying with local and state regulations
• Building a credit profile for your business

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How to Apply for an EIN

The IRS offers several methods to apply for an EIN, all free of charge:

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Online Application

This is the fastest and most convenient method. It is available to businesses whose principal office is in the U.S. or U.S. territories. You can apply online through the IRS EIN Assistant.

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The online application is available Monday through Friday, from 7 a.m. to 10 p.m. Eastern Time. Upon completion, you will receive your EIN immediately.

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Fax

Complete Form SS-4 and fax it to the appropriate number listed on the IRS website. If you provide a return fax number, you will receive your EIN within four business days.

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Mail

Send the completed Form SS-4 to the IRS address listed on their website. Processing time for mailed applications is approximately four weeks.

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Phone (International Applicants Only)

If your business is located outside the U.S. or its territories, you can apply by calling 267-941-1099 (not a toll-free number) from 6 a.m. to 11 p.m. Eastern Time, Monday through Friday.

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Note the following while applying for EIN:

• The application must include the name and Taxpayer Identification Number (SSN, ITIN, or EIN) of the true principal officer, general partner, grantor, owner, or trustor.
• The IRS limits issuance to one EIN per responsible party per day.
• Applying for an EIN is free. Be cautious of websites or services that charge a fee for this service.

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By obtaining an EIN, you establish your business's identity with the IRS, thus helping you comply with tax laws, hire employees, open bank accounts, and apply for necessary licenses and permits. It's a foundational step in setting up your business for success.

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#6 Comply with State and Local Requirements

Establishing an LLC is not limited to just filing formation documents; it also involves ongoing compliance with state and local regulations to maintain your LLC's legal standing and avoid penalties.

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Licenses and Permits

Depending on your LLC's industry and location, it’s mandatory to obtain various licenses and permits. These can include:

• Business Licenses: Required at the federal, state, and local levels, these licenses authorize your LLC to operate legally within specific jurisdictions.
• Professional Licenses: Certain professions, such as healthcare, legal services, and finance, necessitate specialized licenses to ensure compliance with industry standards.
• Sales Tax Permits: If your LLC sells taxable goods or services, acquiring a sales tax permit is essential for collecting and remitting sales tax.
• Health and Safety Permits: Businesses in sectors like food service or manufacturing may need health department approvals or safety inspections.

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The specific requirements vary by state and locality. For instance, in California, a business license is mandatory for most LLCs, whereas in New York, certain professions require additional certifications.

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Consult your state's business authority or local city hall to determine the licenses and permits needed for your LLC's operations.

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Annual Reports and Fees

To keep your LLC in good standing, many states require the filing of annual or biennial reports, accompanied by a fee. These filings usually include updated information about your LLC's management, business activities, and contact details.

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Note the following:

• Filing Deadlines: Some states set the due date on the anniversary of your LLC's formation, while others have a fixed date for all businesses.
• Filing Fees: Fees can range from $10 to over $300, depending on the state.
• Penalties for Non-Compliance: Failing to file these reports on time can result in late fees, loss of good standing, or even administrative dissolution of your LLC.

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For example, in Florida, the annual report is due by May 1st, with a filing fee of $138.75. on the other hand, Delaware does not require annual reports for LLCs but imposes an annual franchise tax of $300.

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Set reminders for these filing deadlines and budget for the associated fees to ensure timely compliance.

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Where is the Best Place to Make an LLC?

The best place to form an LLC depends on your business goals, where you operate, and the benefits you want. Here’s an overview of the best options based on different factors:

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Your Home State — Best for Most Small Businesses

This option helps you avoid extra fees and paperwork and simplifies taxes and compliance. You’ll likely need to register as a foreign LLC in your home state anyway if you form it elsewhere.

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It is ideal for local service businesses, retail shops, and online businesses with operations based in a specific state.

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Delaware — Best for Startups and Corporations

This option features business-friendly laws and courts (Court of Chancery) and no state corporate income tax for out-of-state LLCs. It is also preferred by investors (especially for venture-funded startups).

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However, you’ll likely need to register in your home state too, thereby doubling the cost. It is ideal for startups planning to raise VC funding or expand nationally/internationally.

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Wyoming — Best for Privacy and Low Fees

Entrepreneurs prefer this option because it has no state income tax, low filing and annual fees, and offers strong asset protection and anonymity for LLC owners. It is ideal for online businesses, holding companies, or those wanting privacy and tax savings.

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Nevada — Best for Tax Benefits and Business-Friendly Environment

Making an LLC in Nevada is associated with no state income tax, corporate tax, or franchise tax. It also offers strong privacy protections (no public owner records). However, it has higher filing and maintenance fees than in Wyoming.

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It is ideal for businesses seeking tax advantages and legal protection without physical operations in a specific state.

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Unless you have a compelling reason (such as venture capital, anonymity, or complex multi-state operations), it's best to form your LLC in the state where you live and operate.

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If you want to simplify or automate LLC formation and management, Hirechore can help you handle compliance, filings, and financial back-office tasks. This is usually helpful if you're forming in states with complex requirements.

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Streamline Your LLC Operations with Hirechore

When you form an LLC, managing the day-to-day operations efficiently is just as important as the initial setup. Hirechore simplifies and streamlines important business functions for LLC owners.

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From HR and compliance to finance and equity management, Hirechore helps you keep your LLC running smoothly and legally compliant.

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Here’s how Hirechore can help streamline your LLC operations:

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Compliance Management

Keeping your LLC compliant with state and federal regulations can be complex and time-consuming.

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Hirechore automates compliance tasks such as state registrations, annual report filings, and other regulatory requirements, reducing the risk of penalties or administrative issues. This ensures your LLC stays in good standing and avoids costly legal complications.

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Financial Oversight

Accurate bookkeeping and financial management are important for any new LLC. Hirechore offers robust tools for managing your accounting, tracking expenses and monitoring cash flow.

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This financial oversight helps you make informed business decisions, maintain transparency, and prepare for tax season with ease.

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HR Support

Hiring and managing employees involves multiple HR responsibilities that can overwhelm a growing LLC.

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Hirechore simplifies payroll processing, benefits administration, and employee onboarding, thus making it easier to attract and retain top talent while staying compliant with labor laws.

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Equity Management

For LLCs planning to offer ownership stakes or equity to partners and investors, Hirechore provides cap table management and equity grant tools.

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This helps you maintain clear records of ownership distribution and equity transactions, promoting transparency and smooth operations as your business grows.

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Hirechore handles important back-office operations, thereby ensuring your LLC remains compliant, financially organized, and ready to scale. Learn more.

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FAQs

What is the best way to start an LLC?

The best way to start an LLC involves the following steps:

• Choose your LLC name
• Check name availability and trademark
• Appoint a registered agent
• File Articles of Organization
• Create an Operating Agreement
• Obtain an EIN
• Comply with local permits and licenses
• Maintain your LLC

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What type of business is best for an LLC?

An LLC works well for many types of businesses, but it’s more suited for certain kinds, including:

• Small to medium-sized businesses
• Professional services
• Real estate investment businesses
• Family-owned businesses
• E-commerce and online businesses
• Startups planning for growth

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What is the biggest benefit of an LLC?

The biggest benefit of an LLC is personal liability protection. This means the owners (called members) are generally not personally responsible for the debts and legal obligations of the business. If the LLC faces lawsuits or owes money, the members’ assets (such as their homes, cars, and personal bank accounts) are usually protected from being used to satisfy business liabilities.

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