Navigating Excellence A Step-by-Step Guide to Forming an LLC for a Productive Business


In order for your business to be as productive as can be, it’s important to put the right infrastructure in place. For example, the legal structure you choose for your business can have a huge impact on how your business operates on a day-to-day, administrative level. As such, it can be make-or-break for your company’s productivity.

While there are a number of business structures to choose from, many businesses benefit from the LLC, or Limited Liability Company. This post will consider some of the benefits of the LLC model, and also provide step-by-step instructions for launching an LLC of your own.

LLC Overview

First and foremost, what is an LLC?

It’s important to understand that, when you start generating revenue on the basis of self-employment, the government automatically considers you to be a Sole Proprietor. This means there is no technical or legal distinction between you and your company. For all intents and purposes, you are your company.

When you take the additional step of registering as an LLC, however, you actually do create a legal distinction. In other words, you’re creating an entirely new legal entity. This allows you to maintain your business assets and liabilities in one pot, and your personal assets and liabilities in another.

LLC Benefits

So what are the advantages of registering your company as an LLC? Some of the main benefits include:

  • An LLC offers personal liability protections, shielding your wealth from creditors or lawsuits.
  • Registering an LLC is relatively easy from an administrative standpoint, and has minimal reporting requirements.
  • With an LLC, you can choose between multiple tax reporting structures for your business, offering you some built-in flexibility.
  • LLCs allow you to choose how you wish to allocate managerial duties and profits between yourself and your partners.

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These are just a few of the reasons why the LLC model makes sense for productive businesses. Now the question is, how do you start one?

How to Set Up an LLC

The requirements for registering your LLC can be a bit fluid from one state to the next, and it’s always wise to confirm specific details with your Secretary of State’s office. With that said, the typical LLC registry process looks a bit like this.

1) Select a name for your LLC.

First and foremost, you’ll need to decide on a business name. This has big implications beyond marketing and branding. There are also legal implications, as your LLC must have a name that hasn’t already been used by another LLC in the same state.

This should be pretty easy to determine, as most states offer an online directory you can search, ensuring the name you’re after hasn’t been taken.

2) Appoint a Registered Agent.

Every LLC is required to have a Registered Agent. This can be an individual or an organization, tasked with receiving legal and tax documents on behalf of your company.

Some states will allow you to serve as your own Agent, but most require you to hire a professional service. A simple search can help you find the best LLC formation service in your state.

When choosing an LLC, it’s important to find someone who has a real, physical mailing address in your state. A P.O. Box won’t cut it.

3) File your paperwork.

Unsurprisingly, establishing a new legal entity requires you to file a little bit of paperwork with your state. Specifically, you’ll need to file a document called the Articles of Organization. This document will provide your state with some high-level knowledge about your LLC. Examples include:

  • The name of your LLC.
  • The name and contact information of your Registered Agent.
  • The names of all partners attached to the company.
  • A general description of the mission and scope of your business.

When you file this document, you’ll also need to pay a filing fee. The amount can vary by state, but in most states, it falls somewhere between $15 and $300.

4) Create governing documents.

Before you get your LLC up and running, we also recommend creating some basic governing documents, most notably the Operating Agreement. Your state may not require this, but it’s still good practice.

An Operating Agreement serves as a kind of constitution for your business, denoting how you share duties with any other partners. Having this document can help you run your LLC more harmoniously and productively. An Operating Agreement can also help you minimize legal conflict down the road.

5) Apply for an employer identification number (EIN).

An EIN is sort of like a social security number, but for business entities. You can claim an EIN by visiting the IRS website, and if you’re a U.S. resident you can get your number for free.

While having an EIN is not necessary for launching your business, it is necessary for filing your taxes and processing payroll.

In addition to its primary tax-related functions, an EIN is also necessary when applying for business credit, forming partnerships, or expanding operations. It helps ensure legal compliance, and separates personal and business finances. Having an EIN is essential for both small businesses and larger corporations to operate smoothly.

6) Set up your bank account.

One more step that we’d file under not legally necessary, but still very prudent: Set up a business bank account.

It’s critical that this account not be linked to your personal banking or checking accounts, because one of the golden rules of operating an LLC is that you always keep your business and personal finances separate from one another.

For Maximum Productivity, Choose the LLC Structure

The bottom line: Legal structure can have a huge impact on the productivity of your business. And for most companies, the best way to optimize productivity is by choosing the LLC format. Follow these guidelines to ensure a smooth, successful start for your business.

This was a guest blog. Please review our guest blog disclaimer.

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About the Author: Amanda Clark

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Amanda E. Clark is a contributing writer to LLC University. She has appeared as a subject matter expert on panels about content and social media marketing, and also writes regularly about topics related to small business ownership.

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