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What To Do After Forming An LLC In 12 Steps

Max Smith

Reading Time: 6 minutes

“I have an LLC now what to do?” I have got this question in bunches.

Once you have formed an LLC for your business, it is time to move forward. The next step is to find out what to do after forming an LLC. 

The first and most crucial thing after forming an LLC is to prepare an operating agreement. An operating agreement is basically everything that your company follows. Also, you have other responsibilities like registering for taxes, learning to sign documents, getting documents, applying for business licenses, and others. 

Do you want to learn more about these in detail? Here, I have got everything on what to do after you register your business. So, keep reading to find out the details. 

Remember, just signing up with an LLC is not enough. You have some post-signing responsibilities to keep up with the LLC rules and regulations. This is inevitably important to protect your business as well as grow it.

So, do not panic, saying I have an LLC now what?!

Relax! Just follow the upcoming points and make sure you have done them.

1. Create Your Operating Agreement

An operating agreement is a legal written document that includes the terms and conditions of an LLC. This piece of paper will bring clarity to your business while conducting it according to the state’s law.  

You can use any LLC operating agreement tool and create your own document. If you are not a professional for that, get help from any professional like an attorney.

2. Get Your Business Account

If you have done even a little bit of research about LLC formation, you must know a business account is a must. This business account will keep your personal assets distinct from the business assets. Schedule an appointment or visit the bank in person to open your business account. 

Be prepared to provide all necessary documents and information. It may also require an initial deposit to open the account. 

NB: To open a Bank account, you must have your Employer Identification Number (EIN). So, make sure you have collected it. 

3. Get an Employer Identification Number (EIN)

Most professionals recommend getting an EIN while applying for an LLC. However, if you have skipped doing that, it’s important that you get it now. Getting an EIN is quite simple and easy. You can find all the information on applying online on the IRS website.

4. Apply for a Business Credit Card

Do you know a business credit card can help you in many ways? You can use this card to carry your business expenditures easily. This will keep the financial record clear and keep further estimation efficient during tax season. Also, credit cards offer incredible offers as well. As you will be making good transactions, it would be great to enjoy these rewards all year.

5. Open Your Business Website

In this digital era, business websites are a must. You can get a domain and open a business website immediately online. A website will help you multi-dimensionally.

You can do the business branding and marketing. You will also gain reliability in the e-commerce world. A website with organic web traffic means your business is growing for the long term. Also, make sure the business website is giving a real-time response. This makes the customers loyal and stick with you. 

6. Get Your Business Insurance

Once you have established an LLC, it is essential to protect your business with appropriate insurance coverage.

Luckily, they have several types of business insurance available, and you can choose any regarding your business type. 

These are general liability insurance, property insurance, professional liability insurance, worker’s compensation insurance, Cyber liability insurance, business interruption insurance, and others. Contact your nearest insurance agent to sign up with your insurance partner.

7. Get a Seller's Permit

A seller’s permit is another important thing for conducting sales tax. Some states consider this a must to operate a business. 

You can contact your state’s tax service center to apply for the permit. Most states provide you with the option of online application. You do not have to pay any extra bucks to get the permit. 

However, a specific amount of security deposit is needed sometimes. 

8. Get Your Local Business License

A local business license is usually a type of business approved by your local government or federal state. Most big corporations require a federal business license. 

If you own, manufacture, or import aircraft, animal-based, or alcoholic beverage-type products, you will need a federal business license. Other types of businesses, like automotive mechanics, electronics, agencies, and contractors, require a state business license. 

No matter what your business type is, a local business license is a must for both wholesalers and retailers. 

9. Learn about Taxation

Limited Liability Companies (LLCs) are flexible and pass-through toward taxation. There might be different options available for S corp and C corp business regarding the costs. So, how you should conduct taxation is important.

LLC members may be required to make quarterly estimated tax payments based on their expected federal tax liability. It is also important to consider state-level estimated tax payments.

There may be tax limits on deductions for LLC members. Usually, annual losses are limited to their adjusted tax basis regarding membership interest.

10. Hire An Accountant To Help You With Taxation

No matter how much information you gather, you are certainly not a professional accountant. It would not be wise to wait for tax season and search for a tax accountant then. 

You better be prepared sooner. As an LLC member, you have certain responsibilities to conduct with taxation. An accountant can maximize your tax benefits and avoid other issues. You will get to save money for the whole year with smart taxation decisions. 

You can visit LZ Books and LZ Tax for expert advice.

11. Keep Your LLC in Active Status With The State

To keep your LLC in active status with the state, you will need to fulfill all ongoing requirements and obligations, such as filing annual reports, paying fees, and maintaining a registered agent. Make sure to do so to avoid your LLC falling into bad standing or being dissolved by the state. 

It is important to stay updated on state regulations and deadlines to ensure your LLC remains in good standing.

12. Report Beneficial Ownership Information of your LLC

As of the most recent report, the beneficial ownership information of our LLC is as follows:

  • Name of Beneficial Owner: [Name]
  • Title: [Title]
  • Ownership Percentage: [Percentage]
  • Address: [Address]
  • Contact Information: [Phone number, email]

If there have been any changes in beneficial ownership since the last report, please provide updated information.

What if you opened your LLC long ago but did nothing with it? You can still do something valuable with it. Do you know what can be done with your LLC? Let’s find out more about it in our next section!

What Happens If You Start an LLC and Do Nothing?

If you start an LLC and do nothing, several things may happen depending on the state where the LLC is registered. Here are some potential consequences:

  • Most states require LLCs to file annual reports and pay annual fees to maintain their good standing. If you do nothing, your LLC may fall out of good standing and could be subject to penalties or even dissolution by the state.
  • Without the LLC’s protections, you could be personally liable for any legal actions against the business.
  • If you do nothing, your LLC will default to being taxed as a disregarded entity (sole proprietorship for single-member LLCs or partnership for multi-member LLCs). There may be more advantageous tax treatment for your business.
  • One of the main benefits of forming an LLC is to protect your assets from business liabilities. However, if you do nothing and fail to maintain the LLC properly, you may lose this liability protection, leaving your personal assets at risk.

Conclusion​

LLC is an incredible way to grow your business safely. However, just getting an LLC is never enough. You must know what to do after forming an LLC to take the proper steps make your LLC successful. Ultimately, the goal is to build a sustainable business that generates revenue and provides value to your customers.

Did things get puzzled in mind? Let’s explore key points in the next section. 

Key Points

  • Only forming an LLC is not enough, you have to keep updates to grow the business.
  • Whether you operate your business or not, you must pay annual fees and taxes. 
  • Make sure you know about the LLC rules and regulations.
  • Your LLC may get into trouble if you don’t pay the fees and taxes. 
  • If you neglect your LLC, you may be personally liable for business debts. 
  • Contact any professional to form any legal process.
  • If you skip doing things after forming an LLC, it might not get your business the expected protections.

Frequently Asked Questions

Can you apply for EIN before LLC?

Yes, you can easily apply for an EIN from the IRS website. It is not necessary to form an LLC first to get an EIN. There is a maximum possibility. 

What happens after you start a business?

After you start a business, you will need to focus on growing and managing it. You will also need to make sure you comply with any legal or regulatory requirements that apply to your business, such as obtaining the necessary licenses, permits, and insurance and filing your taxes properly.

How to make money with an LLC?

There are various business activities, such as services, sales, or product manufacturing. It helps your LLC to make money. Besides, your LLC can also earn more cash (benefit) by investing its capital in other businesses or real estate. 

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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