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How To Form An LLC Online? (2024 Guide)

Max Smith

Reading Time: 8 minutes

Do you want to form an LLC online? It’s easy and possible in all the states of the USA. The combination of LLC protection and online platform convenience makes it a practical choice.

It eliminates in-person visits and simplifies administrative tasks, saving time and effort. But you may need the necessary documents, just like when forming an LLC offline. You must abide by the rules and maintain proper steps to form your LLC correctly. 

Do you want to know the steps in detail? Let’s go!

An LLC (Limited Liability Company) is a legal entity. It has the right to operate a business, own assets, file a case, and face lawsuits. It’s a separate legal identity from any other stern or human company. 

An LLC is a great way to protect your personal assets and form a formal business structure. But do you know how to create your LLC (online)? Then read the next section!

How To Form An LLC Online? Step By Step Guide

Forming an LLC online brings numerous benefits for entrepreneurs. Indeed, you are curious to know how you can do that.

Here is a step-by-step guide for you.

1. Decide Tax Structure

If your LLC business is single-membered, it will be taxed as a sole proprietorship. It means the profits will be reported on the personal tax return and subject to self-employment tax.

If you opt for your LLC business as an S Corp, you must pay yourself a salary. It will be included in business expenses. The remaining profit will not be subject to self-employment tax but only income tax.

2. Choose a Business Name

Choose a name for your LLC business that goes with your brand. Selecting a unique one will ensure it isn’t identical to other companies. You need it to be available for registration. You can search for the intended name in:

  • The Internet.
  • Your state’s Secretary of State Business Entity database.
  • Department of Corporations.

You will need a DBA (Doing Business Ass) for your LLC business if you plan to have a name for a specific business branch. It will save you time to get an LLC.

Ensure that it complies with your state’s LLC naming requirements. Also, your name must contain the word ‘LLC.’ There cannot be any financial words like insurance, trust, bank, etc.

3. Select a Location

Although you are applying online, you must still have a physical location address to receive official mail, so you should choose one with lower setup and running costs.

Selecting a jurisdiction that minimizes sales tax benefits your LLC business. Also, look for a state where the asset protection laws are solid because getting sued for wrong delivery or product damage is expected in this business.

4. Create a Domain Name

Your business can be offline, but you should get a website for an online presence. In fact, you can also create a domain name to start your online business as an LLC.  It is the Internet business website for your LLC.

Start by checking if that domain name is available. You can use domain-name search tools for it. Then, purchase your domain name from a domain registrar to register it. For this, you might need to file the necessary paperwork.

5. Appoint a Registered Agent

Appoint a registered agent to start an LLC business. Your agent can be an individual or a business entity. They will be responsible for receiving legal and official documents on behalf of your LLC. It can be subpoenas, regulatory and tax notices, or correspondence.

Usually, a registered agent should meet some regulations. You can even be your registered agent if you meet these criteria:

  • An individual of at least 18 years or a registered entity,
  • A resident of the company formation state,
  • Have a physical address where your company was formed,
  • Be available during regular office hours, &
  • Meet the license requirements.

6. File Articles of Organization

Prepare and file the Articles of Organization for starting an LLC business. Depending on your state, it can also be called a Certificate of Formation or Organization. 

You can file it with the Secretary of State or the appropriate state agency. Download the form accessible from your state website.

There is a filing fee. This document is important because it officially establishes your LLC. It contains the basic information about your LLC, like:

  • Name and address,
  • Registered agent details,
  • LLC members’ details,
  • Business purpose statement, &
  • Management option (member-managers or manager-managed)

Remember, each state has different filing requirements and forms. So, carefully research the Company Act and the state of business registration. Also, as mentioned before, there are fees involved when starting an LLC as you have to pay for certain documents.

7.Publish a Notice

First, not all states require you to go through this step. So you need to check this with the Secretary of State. Make sure you will need to publish a notice for your LLC business. For example, Arizona, Nebraska, and New York require this.

8. Draft an Operating Agreement

Drafting an operating agreement is essential if you start any form of LLC. Not all state laws obligate you to do this, but a smooth LLC business journey does. It clarifies the internal workings and mitigates potential disputes. 

In an LLC operating agreement, there should be:

  • Ownership structure outline,
  • Management system,
  • Members’ roles and responsibilities,
  • Profit and loss allocation,
  • Operational procedures,
  • Financial structure,
  • Proceedings for leaving or selling shares & more

9. Obtain an EIN

An EIN is also known as the Federal Tax Identification Number. You obtain an EIN by applying to the Internal Revenue Service or IRS.

You can apply for this online or by mail. The IRS uses this 9-digit number to identify taxpayers who must file business tax returns. It will act as your LLC identification number.

You need to get this for starting your LLC business to help with the following:

  • Tax purposes,
  • Business bank account,
  • Hiring employees, &
  • Company credit card

10. Open a Business Bank Account

Open a separate bank account to start your LLC business. It will keep a clear separation between your personal and business finances. Maintaining this is a must for the asset protection that an LLC provides.

For this, choose a bank that caters to businesses. This will manage your LLC’s payments and business transactions. But in some cases, like being a non-resident, one might not be qualified to open a local US bank account.

In that case, open a business account with an EMI or Electronic Money Institution. It serves as a bank account with some alternatives.

11. Get Business Licenses and Permits

Research and get any business licenses and permits you need to start your LLC online business. Those should be specific to your industry and location. Depending on the nature of your business, the license can be local, state, or federal.

You must acquire these to avoid heavy penalties, or your business might get closed. Contact your local jurisdiction to understand business license regulations.

12. Comply with Tax Requirements

Your tax obligations may include federal, state, and local tax requirements. It also depends on whether your business structure is a sole proprietorship, partnership, or corporation. For selling products, sales tax must be collected and paid for each item sold.

The state sets your tax filing requirements for LLC businesses. You can learn about them from the Secretary of State’s office or their website. Also, consult with a tax expert to avoid any fines.

13. Ensure Trademark Registration

Covering the step of naming your business will not mean it won’t be available in another state. To prevent this from happening, ensure a trademark registration. Check your selected name for trademark availability.

You can secure your LLC’s business name and logo in all 50 states. Even if you don’t do it now, consider expanding your business. Trademark registration will provide nationwide protection.

14. Have Website Compliance

Starting an LLC online business means you will have a website. You can purchase web hosting or set up your website. You need to make sure it has all the website compliances. There are adequate laws and regulations for:

  • E-commerce governing,
  • Data privacy,
  • Online advertising, &
  • Consumer protection.

15. Keep Annual Requirements Going

To keep your LLC in good standing with the state, maintain annual requirements with professional integrity. Once you start the business, you must pay yearly limited liability fees to your state.

These fees are unavoidable, regardless of your LLC’s activity or profit. They are called annual registration fees, yearly certificates, annual reports, or franchise tax reports.

What are the Advantages of an LLC

An LLC offers numerous benefits. Some of them are given below.

Pass-through Taxation

One of the most notable benefits of having an LLC is the “pass-through” taxation system. It saves you from double taxation cuts. 

Liability Protection

The key reason behind having an LLC is having limited liability protection. It saves assets from personal debts and liabilities. 

Management Flexibility

You can run your LLC management operations. But you can also hire a manager and let him handle the management. 

Easy Formation

Just apply with the associated fees and required documents to form your LLC. Isn’t it easy?

Do you want to know more about the benefits? Then, read the advantages and disadvantages of LLCs

Conclusion

In the end, if you want to form an LLC online, you must know the LLC structure first, with the convenience of online platforms. Following the step-by-step guide, you can quickly form your LLC online. 

Get help from an expert service provider to ensure you don’t make mistakes. Follow the steps thoroughly and make informed decisions at each stage.

Key Points

  • Single-member LLCs are taxed as sole proprietorships, with profits on personal tax returns. An S.C. status avoids self-employment tax but is subject to income tax.
  • Choose a unique business name that aligns with your brand and complies with state requirements. Check its availability and include the word “LLC.”
  • Select a cost-effective physical address for official mail reception, even for an online LLC. Choose a jurisdiction with strong asset protection legislation and a low sales tax.
  • Create a domain name for the website of your LLC. Use domain name search tools to find out if it is available. 
  • Appoint a registered agent to handle official correspondence. They can be an individual or a business entity. But they should meet the requirements of age, residency, and availability during office hours. You can be your agent if you meet the conditions.
  • Submit the Articles of Organization to establish your LLC. It should include the LLC name, address, registered agent and members’ details, business purpose, and management structure.
  • Check with your Secretary of State to determine if you should publish a notice for your LLC. If you do, choose an approved local newspaper to publish.
  • Drafting an operating agreement guarantees a successful business journey. It covers ownership structure, management, roles and responsibilities, and more.
  • Get an EIN for taxation, a business bank account for hiring staff, and a company credit card. You can apply for it through the IRS by mail or online.
  • Open a different bank account to keep personal and business finances separate. An EMI account can be an option if you cannot do it as a non-resident.
  • Ensure your business licenses and permits are specific to your industry and location. Contact your local jurisdiction if you need help understanding.
  • Comply with local, state, and federal tax regulations according to your business structure. Also, take care of sales tax collection for online sales.
  • Have your business name trademarked to prevent it from being used nationwide
  • Confirm to the rules and laws governing websites. This includes regulations regarding e-commerce, data privacy, online advertising, and consumer protection.
  • Keep your LLC in good standing by fulfilling its annual requirements regularly. You are bound to pay these regardless of your LLC’s activity or profit level.

Frequently Asked Questions

Can I form an LLC online for free?

Forming an LLC online is not free because you have to pay the state-required filing fees.

What is an LLC application form?

An LLC application is a legal document. You use it to register a limited liability company with the state government officially.

Max Smith - LLC Formation

He is a seasoned entrepreneur and legal expert at LLC Formation Hub. With a stellar track record in both business and law, Max simplifies the complexities of LLCs. His practical insights, featured on LLC Formation Hub, empower entrepreneurs across the USA. Max merges business finesse with legal acuity to guide businesses toward success.


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