How do I start an LLC?
An LLC, which stands for limited liability company, is a business entity structure that offers the personal liability protection of a corporation along with the tax benefits of a partnership. In other words, members of an LLC are not personally liable for the liabilities or debts of the company. Furthermore, the company's income is "pass through" meaning that an LLC's revenue gets passed to the members and is taxed as personal income rather than being hit with a double taxation seen by corporations.
Startups and early stage companies will look towards LLCs when forming their business for a handful of reasons:
- They are easy and cost-efficient to set-up and maintain
- They offer personal liability protection, meaning the member's personal assets are not at risk
- They have favorable tax laws
If you are starting your business, you likely will want to start off as an LLC.
It's one thing to know how to start an LLC, but that is worthless if you don't know when you should do it. Let's break down the relevance of this question based on two high level categories. We'll walk through an explanation as well as provide a score, 1-10, that shows you how relevant this question is whether you do or don’t have a product.
The first scenario we will walk through will be if you do not have a product yet. Whether it is a website or a mobile app, you are still in the ideation or planning phase and have not yet built anything. Maybe you have started development but just aren’t finished with your first version. Whichever it is, we'll get into why this question is or isn’t relevant and why you should or shouldn't care about it if you do not have a product.
If you don't have a product yet, you need to start thinking about the process of registering an LLC. It is imperative, and legally required, that you have an LLC before you go to market. So, be sure that you are familiar with this process and have it on your roadmap to take care of before you actually launch your product and go to market.
Live Product: 10/10
The second category is if you do have a live product. Maybe you just launched your business or maybe it's been live for years and you're continuing to improve its quality and release new features. Regardless of the scenario, if your product is live, this question carries a different weight of relevance.
You are legally required to have a legal business entity if you have a live product and are out in the market. So, if your product is live, you need to be familiar with this process as you not only should have gone through it but you will need to understand the details of your operating agreement, know what your EIN is, understand how to pay taxes, and all that other fun stuff that business owners have to do!
Starting an LLC can be difficult to do alone. It is something that can require a lot of time and even more critical thinking. Thankfully, there are tools and services out there that can help you through this journey. Keep reading below to find out more!
There are many services out there that will help you create your LLC and walk you through all the relevant steps in getting your business entity off the ground. We'll walk through five services we recommend looking into, along with their associated costs:
Incfile helps you quickly and easily create your LLC or other business entity. Save money and time with Incfile’s $0 (+ state fee) LLC Registration process. Plus, they have a full suite of startup services (like banking and bookkeeping), which means Incfile not only helps you get started, but supports you in your continued success as your one-stop shop.
Cost: $0 + state fees
Doola offers a simple way to do business in the US — even if you don't live there! They will help you form your company, get your EIN, and even help you open your business bank account. Thousands of global founders use doola to accurately, safely, and easily incorporate a US-based LLC from anywhere in the world.
Cost: $197 + state fees
ZenBusiness' all-in-one platform and team of experts quickly and accurately form your LLC, plus keep you on track as your business grows. Having helped over 400,000 business, they'll walk you through each of the steps, and offer services from just setting you up all the way to maintaining your organization annually. Their basic offering takes care of the filing while their most popular offering includes an operating agreement as well.
Cost: $199 + state fees
Get the legal help you need, with their do-it-yourself services or attorney advice. LegalZoom is the nation's leading provider of personalized, online legal solutions and legal documents for small business, including LLC formations. Having helped over 3.5 million business, LegalZoom is an expert in their space.
Cost: $79 + state fees
Rocket Lawyer is an online legal technology company that makes the law simpler and more affordable for businesses, families and individuals. As a large institution, RocketLawyer is a go-to service that helps you beyond just LLC formations.
- An LLC, which stands for limited liability company, is a business entity structure that offers the personal liability protection of a corporation along with the tax benefits of a partnership.
- You should be aware of whether or not you need to create or be an LLC, regardless if you have a product or not.
- There are tons of services out there than can help you out with this process. They take care of every part of the process so you don't have to.