Ready to start your foray into life as an entrepreneur and launch that long-planned LLC?

Great choice — particularly if you’re running a sole proprietorship! The LLC form grants you many of the benefits afforded to large-scale corporations, without requiring you to incorporate. With an LLC, you will be personally protected from judgements related to debts or lawsuits while also enjoying a host of tax advantages.

Filing for an LLC certificate is easy and relatively inexpensive. But like most business owners during the first phase of a company’s life, you may not have an abundance of extra cash. You would obviously prefer to limit your overhead and redirect any extra funds to the business itself.

There are basically two ways to set up an LLC. The first is to go through your state’s business website where you will select a name for your LLC. Choose thoughtfully and make it unique. You don’t want to deal with infringement claims if the name is too similar to another registered trademark. If the name is available, but you’re not ready to file all of your paperwork, you can pay a reservation fee to hold the name for a specified length of time.

If you’re aiming to avoid a fee for reserving the business name, and you’re prepared to file your paperwork right away, be ready to supply your LLC’s:

• Name and address
• Duration of existence (if not perpetual)
• Purpose for formation

You will additionally be asked for the name and address of the LLC’s registered agent. This is the individual who will receive and manage all correspondence between the state and your business. If your registered agent is somebody other than yourself, some states require signatures from both individuals. In most states these documents will be filed with the Secretary of State. You will sign your paperwork, pay your filing fee, and then wait for approval in the form of your business certificate.


Every state charges an LLC filing fee. The fee amount varies depending on your state.

The second way to set your LLC, is to pay a company to do it for you. You might be thinking — why involve the middle man when I can do it all myself and save money? This is an astute point, but keep in mind, formation companies provide a number of services that come with their own upside.

In addition to other perks and customizations, a solid formation company carries out each of the steps you would normally undergo for yourself — including obtaining your Employer Identification Number (EIN). The companies often save you significant time by gathering all of your required paperwork, streamlining the forms, and filing them on your behalf. All you’re required to do is review, sign, and confirm, while they handle to rest.

Unquestionably, their single most valuable service is providing a registered agent for your business. The registered agent acts as a useful intermediary to sort through all the junk mail your business receives, and will scan important documents and email them to you or provide a place online where you can access them. With a separate registered agent, you keep substantially greater privacy as your home address stays out of the public record. This can be a crucial filter for business owners who plan to work from their own home — even for a limited initial period of time.

Formation companies frequently provide additional digital conveniences like a personalized dashboard that lets you view and manage documents like your business formation certificate, your Employer Identification Number or official materials. Additionally, if you want immediate visibility online, many companies offer web hosting deals as part of their long-term services. However, they tend to come at a higher cost than securing your own web hosting. If you prefer to find web hosting separate from your formation company, BlueHost and other services provide rates as low as $3.95 a month.

As a final key advantage of going through a formation company, you’ll be able to offload managing many legal details of your business. A formation company can provide the continuous upkeep that ensures your business meets all state requirements for compliance and regulation. You get the peace of mind knowing your LLC is in good standing at all times.

Formation company services vary widely and offer a range of products and price tiers. Some of their add-on features may be extraneous to your needs, while others may prove highly worthwhile depending on your company and preferences. Above all, do your research, make note of the distinctions, and consider down-the-road time and cost savings when making your decision.

Whatever your choice, congratulations on your new LLC! Enjoy the adventures ahead.


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