An LLC, known as a limited liability company is a partnership that protects personal assets like a corporation. Your state has its own rules, so check for those requirements. With an LLC, you have a choice of being taxed as a corporation or choose to be a pass-through entity, meaning you avoid double taxation.

What You Need

You need to file Articles of Organization with your secretary of state's office. This lists the information pertinent to your business. You file a short form in the name of your business and your members along with their contact information. There will be a filing fee that ranges from $20s to $200. Paying this filing fee is one of the disadvantages of being an LLC. Your state will have specific filing requirements. Go to your state's website to find out LLC requirements. To legally protect yourself, according to The Wall Street Journal, write an operating agreement that spells out your business arrangement, percentage of member's ownership, rights, responsibilities and roles. As part of forming your LLC, decide how you will structure your business as a working model. If there should be a problem later, this business arrangement will act as a legal document. One person from your LLC must be listed as a registered agent, who will be the person receiving any legal papers. Many states have easy-to-follow procedures, but The Wall Street Journal suggests you should have an attorney read the completed papers. Some states do charge annual fees and taxes for LLC. Some states require that you publish a notice in your local newspaper of your intention to form an LLC.

Choosing the Name

Doing some research at your state's LLC office helps to determine name availability. If you are not ready to file your Articles of Organization, some states will allow you to reserve your name. Choosing a name involves making sure you are not infringing on another business' trademark. Filing your Articles of Organization also acts as registration of your business name.

Other Requirements

Before you open your business, check to make sure you are legally able to do business. Permits, licenses, tax registration certificate, zoning permit, seller's permit and a federal employer identification number are all needed before you can accept any form of compensation.

Source:

Nolo .com: How to form an LLC Free Legal Information

Wall Street Journal.com: How to form an LLC

Legal Zoom.com: LLC Overview