The Northwest LLC
How to Form an LLC
An LLC is a permanent public record. When you start one, do it the right way with a complete Business Identity set up on day one. This will protect your privacy, give you control over your intellectual property, and set you up to grow.
To start an LLC, you’ll file Articles of Organization with your state. Select your state below to use our generator, and we’ll walk you through the information you need to create your LLC. You can save your progress anytime, or skip ahead and hire us to file your LLC for you. When you hire us, you get more than an LLC. You get a free operating agreement, resolutions, membership certificates, a domain name, business address, mail scanning, phone line, open source web hosting, Brand Protection, and of course—registered agent service (free for the first year and then $ per year until the world ends).
State Requirements: Articles of Organization
First, you'll form your LLC (limited liability company) at the state level by filing Articles of Organization — called a Certificate of Organization in Connecticut, Idaho, Iowa, Maine, Nebraska, Pennsylvania, and Utah — with your state's filing authority. In most states, this is the Secretary of State; Arizona, for example, files with the Arizona Corporation Commission.
Any information you provide on the Articles of Organization becomes a matter of public record. If privacy is a concern, consider forming with a registered agent who can use their information in place of yours where applicable.
Choose Your LLC Management Structure
When forming an LLC, you must choose between two management structures: member-managed or manager-managed. This determines who may make managerial decisions and enter your LLC into legal contracts.This selection determines whether all owners (members) of an LLC may make management decisions or whether only certain owners or hired managers may make these decisions.
- Member-managed LLCs: Under this management structure all members/owners have authority to make management decisions and enter the LLC into legal contracts. This is the most common structure and is the default in most states. Member-managed LLCs are best for business’s whose members are active participants in the business.
- Manager-managed LLCs: Under this management style one or more designated managers, who may be members or outside individuals, are appointed to handle day-to-day operations. Manager-managed LLCs are often good for company’s whose members are passive investors.
Because some states (like Wyoming) require that you list the names of either your members or your managers, but not both, manager-managed structures are sometimes used to maintain the privacy of the LLC owner.
Designate a Registered Agent
A registered agent is simply a person or business that maintains a physical street address in the state your business was formed and agrees to be available during business hours to receive legal notices for your company, like service of process. All states require an LLC to appoint and maintain a registered agent, but in some states like New York, the Secretary of State by default acts as your registered agent.
Some states have a different name for registered agents. For example, they are called a statutory agent in Arizona and Ohio, resident agent in Kansas, Maryland, Massachusetts, Michigan, and Rhode Island, and agent for service of process in California, Louisiana, New York, and West Virginia.
Three benefits of hiring a commercial registered agent:
A commercial registered agent is a company like Northwest Registered Agent that serves different clients instead of being a registered agent for just one company.
- Privacy. When you hire a commercial registered agent, much of your own information can be left out of those public documents, adding one more layer of privacy to your LLC.
- Freedom. If you don’t have a staffed office, than committing to being available at your place of business during all business hours can be a real burden.
- Compliance. Good registered agents offer annual report reminders and other compliance services that can really be a life saver.
A commercial registered agent can be your biggest ally in the battle for your right to privacy. Find everything you need to know about Registered Agent Service for your LLC.
Name Your LLC
Three technicalities to be aware of before finalizing your name with the state:
- The fun part! You get to name your LLC. Now, you’ve probably spent hours coming up with the perfect name, but there are three technicalities you’ll need to be aware of before you finalize it with the state:
- The name must include LLC, L.L.C., or the words Limited Liability Company.
- The name can't imply the company does something it doesn't, nor anything illegal.
Consider choosing a name that is easy to spell, pronounce, and remember. Before settling on a name, you’ll also want to check for any federal trademarks that may lay claim to your name.
Determine Your Business Address
When forming your LLC you’ll encounter reference to a couple of different addresses on your formation documents. They may sound interchangeable, but there’s an important difference.
- Principal address: A business’s principal address refers to the physical location of your LLC operations. It must be a street address, not a P.O. Box. To protect your privacy, some registered agents allow you to use their address here (Registered Agent Center does).
- Mailing address: Your business’s mailing address refers to the address where your company receives its mail. It can be the same as your principal address, a separate P.O. Box, registered agent service, or virtual office mailing address.
If you’re forming your LLC in a state you don’t live, you may want to look at mail forwarding or virtual office options that give you access to an address in the state where you are forming without you having to high fees for leasing. There are also many other options for how you can get a business address, whether you’re in-state or out of state.
Skip the Work — Let Registered Agent Center Handle It
When you hire us, you get more than an LLC. You get a complete Business Identity set up on day one.
$39 + State Fees — Form Your LLCFederal Requirements: EIN and Taxes
Once you’ve formed your LLC at the state level, you’ll want to get a federal tax number from the IRS, and decide how you’d like the IRS to treat your LLC when it comes to taxes.
Apply for an EIN
After starting an LLC, you’ll likely need to obtain an Employer Identification Number (EIN) from the IRS. The EIN is like a Social Security number for your LLC. Every LLC that will pay taxes or hire employees needs an EIN. In some cases it is not required, but it is a good idea because using an EIN for your business helps establish a clearer separation between your business and your personal finances.
Apply for an EIN at no cost with the IRS by filing Form SS-4 Applying online on the IRS website typically takes just a few minutes.
Choose Your Tax Classification
By default, the IRS will treat your LLC as a sole proprietorship/partnership for tax purposes. Sole proprietorship and partnerships are pass-through entities. This means any income you receive from your LLC will simply be claimed on your personal income taxes.
An LLC also has the option of being taxed as an S-corp. agree to draw a minimum salary from the LLC. That minimum income is subject to federal payroll taxes (Social Security and medicare). However, any income above that specified salary will not be subject to payroll taxes and will instead be taxed as a distribution.
The higher your LLC’s revenue, the more likely you’ll benefit by electing to be taxed as an S-corp. Individual situations vary widely, of course, but most people will pay less taxes as an s-corp if their LLC earns over $80,000-$100,000. To elect S-corp treatment, complete Form 2553 with the IRS within 75 days after your LLC is formed.
Local Requirements: Licenses and Permits
When forming an LLC, many entrepreneurs focus on state-level filings but overlook the important compliance steps required at the county, city, and other local agency levels. These requirements vary based on location, but here’s an overview of the typical local requirements LLCs need to have:
Business License
In most cities and counties, you will need a general business license before you can legally operate. This license may also be called a business tax certificate or an occupational license. The name of the specific office that issues business licenses varies from city to city and county to county, but are often The City Clerk’s Office, County Clerk’s Office, Department of Finance, or Business License Division. For most small businesses a license will cost $30-$100 and typically must be renewed annually.
Zoning and Land Use Permits
Before you open your doors, it is important to confirm that your chosen location is zoned for the type of business you plan to run. Zoning and land use permits are handled by the local planning or zoning department. Businesses that plan to operate out of a local store front, require construction or renovating an area, or some home based businesses require a zoning permit. To check if your LLC needs a permit, contact your local zoning department.
Sales Tax Permit
If your LLC sells goods, and in some states certain services, you will need a sales tax permit. This permit allows you to collect sales tax from customers and is usually issued by your state’s Department of Revenue. In Texas, for example, businesses apply for a Sales and Use Tax Permit through the Texas Comptroller’s Office.
Health, Safety, and Fire Permits
Many businesses must also meet local health and safety standards. Restaurants, salons, food trucks, and gyms often require permits from the health department, while most physical business locations need to pass a fire department inspection. In New York City, for instance, restaurants must undergo inspections by the Department of Health and Mental Hygiene before they can operate.
Resale Certificate
Sales tax is only applied to products consumed by the customer. Goods and materials purchased by businesses for resale are exempt from paying sales tax on those items. Resale certificates are how business owners get exempt from these taxes. It some states, like Wyoming and Arkansas, you’ll need to first get your sales tax permit. In other states you’ll be able to apply for a resale certificate by itself. Present this certificate when making qualified purchases.
Professional License
Certain occupations are regulated by the state and require a license to legally operate. These are professions that require a specific educational credentials and training. Operating a business in one of these professions without a license is a serious offense and can result in criminal charges. Fields that require a professional license include:
- Medical (doctors, nurses, psychologists)
- Legal (lawyers, judges)
- Education (teachers)
- Finance and real estate (CPAs, insurance sales)
- Engineering
- Trades (plumbers, electricians)
- Others: massage therapists, security guards
There are others too like massage therapists and security guards. Check with your state to verify whether your field requires a professional license to legally operate.
Ongoing Compliance Requirements
Failure to maintain state compliance requirements and you could lose your company’s good standing, along with its liability protection.
| Requirement | Details |
|---|---|
| State Initial Report | Alaska, California, Connecticut, Georgia, Louisiana, Nevada, South Carolina, Washington all require a one-time initial report shortly after forming your LLC. Missing this report can lead to fines or even administrative dissolution (the state closing your business). |
| State Annual Report | Almost all states require some form of ongoing compliance reporting (exceptions being Ohio, South Carolina, Arizona, New Mexico, Missouri, and Pennsylvania). In most states, this is in the form of an annual report. Don’t worry, this is mostly a modest fee (though California charges $800 and Massachusetts charges $500). |
| Renew Business Licenses | Many businesses are required to hold local, state, or federal licenses or permits to legally operate. In most cases, these licenses must be renewed regularly to stay compliant. Requirements vary depending on your industry and location, and failure to renew on time can lead to penalties or even business closure. |
Form Your LLC with Expert Help
We handle the paperwork so you can focus on your business.
Get Expert HelpYour LLC Online
No matter what your business is, establishing an online presence is critical. Setting up a business website, getting a domain name, creating a personalized professional email address are all how people can find and interact with your business online.
Domain Name
Securing your domain name should be one of the first steps after forming your LLC. Ideally, your domain should match your business name so customers can easily find you online.
Business Website
Your LLC’s website acts as your online storefront. Even a simple, one-page site with your business name, contact information, and services can go a long way toward building trust.
Professional Email
A dedicated business email address that uses your domain (e.g., [email protected]) signals professionalism and builds credibility.
Local Phone Line
Getting a dedicated business phone line allows you to keep your personal and professional lives separate. With VoIP phone service, you can call and text from your own cell phone, wherever you have internet.
Brand Protection
Prevent other businesses from copying your brand. When you have Brand Protection, usage of your business name, domain, and other brand assets is monitored, and you’ll be alerted if someone copies it.
Benefits of Filing with Registered Agent Center
Privacy
As your registered agent, our registered office is listed on your LLC’s formation documents, and we sign as your business’s organizer. We never sell your data. We don’t list your personal information on filings if we don’t have to. It’s all part of our commitment to Privacy by Default®and achieving a level of privacy you can’t get when you file yourself or hire a standard filing service.
Business Address & Mail Scanning
As part of our standard service, we include limited mail scanning in every state. Plus, you can list our address as your business address. Combining business address and mail scanning ensures an increased level of security and service unmatched in the LLC formation industry.
Local Expertise
Knowing the ins and outs of every state doesn’t just help us provide faster, better service—it also helps you. We’re invested in a national team of Corporate Guides®, more than 200 local business experts you can call or email to answer questions about your LLC.
More Than an LLC
Starting a business goes beyond filing paperwork with the state. If you’re serious about reaching clients and customers, you need a domain name, a website, a business phone number, business email addresses, and SSL Security. You can piece those services together with different companies, or you can hand it off to us. At Northwest, we’ll stand up your entire Business Identity instantly.
Types of LLCs
There are a number of different types of LLCs depending on your specific situation. Certain professions like lawyers and doctors are required to operate under a Professional LLC, for example. You can learn more about these different types of LLCs below.
Common Types
- Single Member LLC — Owned by one individual
- Multi-Member LLC — Two or more owners
- Member-Managed LLC — Owners run daily operations
- Manager-Managed LLC — Specific owners or hired managers run operations
- LLC S Corp — LLC with S-corp tax treatment
LLCs for Specific Purposes
- Professional LLC (PLLC) — For licensed professionals
- Series LLC — One LLC with separate cells for assets/ventures
- Low-Profit LLC (L3C) — Mission-driven, not profit-driven
- Non-Profit LLC — Operates for charity or public benefit
LLC vs Other Business Structures
Though you are likely interested in forming an LLC for the right reasons, you might be wondering how the structure of an LLC compares to other business structures.
Sole Proprietorship vs LLC
A sole proprietorship is a one-person business that has no legal separation between it and its owner and does not file formation paperwork with the state. This is appealing because of its simplicity. To operate as a sole proprietor, all you need is to sell something. In some cases, you may need to obtain a business license under your own name. If you want to create a business name for your sole proprietorship, apply for a doing business as (DBA) and you’re off to the races.
Corporation vs LLC
Corporations and LLCs are both business entities formed at the state level that separate the legal obligations of its owners from their business. When thinking about LLCs vs corporations for small businesses, remember an LLC offers the same liability protection as a corporation, while avoiding some of the more rigorous and complicated rules that corporations are subject to. Corporations can be better for attracting investors and allowing for separate ownership through stock, which an LLC can’t have.
What Is an LLC?
A limited liability company (LLC) is a business structure that legally separates the legal liabilities of a business from it’s owner. It is a hybrid business structure that has elements of both partnerships and corporations.
Flexibility
LLCs allow for multiple management structures and taxation options.
Liability Protection
Like a corporation, LLCs offer limited personal liability — protecting your personal assets from business debts and legal obligations.
Privacy
When formed and managed with a commercial registered agent, an LLC offers considerable privacy.
Simplicity
LLCs have fewer guidelines and procedures to follow than a corporation.
Affordability
An LLC is relatively inexpensive to form and maintain. State fees generally range from $100–$300.
An LLC is considered an ideal business structure for small business because it provides limited liability and multiple tax election options while remaining affordable to form and maintain.
Limited Liability Company (LLC) FAQs
What is required to keep an LLC up and running?
The beauty of the limited liability company is the lack of annual meeting requirements — unlike corporations. A multi-member LLC may choose to hold annual meetings, but it's not required. You can call a meeting at any time with other members.
For a single-member LLC, it's basically just documenting changes when needed. There are no officer roles to fill out on paper (as with a corporation), and no voting requirements for decisions.
Who are the members and managers of an LLC?
The members of a limited liability company are the owners. In almost every state, public documents require you to list members or managers. For example, 10 families investing in a vacation rental might all be members, but hire a property manager to handle day-to-day operations — who would be listed as the manager.
Members can always vote out the manager(s) of the LLC.
What's the best state for an LLC formation?
The best state is almost always the state where you live, particularly if you're doing business there. If you're running an internet business or using the company as a holding company, a tax-friendly state like South Dakota, Wyoming, Nevada, Montana, or Delaware might bring some benefits — but consult a tax professional first.
Forming in a tax-free state won't benefit you much if you live in a normal taxing state. At the end of the day, it's often simplest and cheapest to form in your home state.
What's the difference between an LLC and a corporation?
The major differences boil down to ownership, management, and taxes. LLCs are owned by members who can manage directly or appoint managers — giving LLCs the flexibility of operating like partnerships or corporations. Corporations have stockholders and more rigid governance requirements.
How much does it cost to start an LLC?
Typically around $100. Each state sets its own fees to file Articles of Organization — usually a flat filing fee ranging from $40 (Kentucky) to $500 (Massachusetts). Tennessee bases their fee on the number of members, ranging from $300 to $3,000.
Can a sole proprietor be an LLC?
No, but a sole proprietor can become an LLC. A sole proprietorship and an LLC are two different kinds of business structures. If you're a solo business owner that has never registered with the state to form a business entity, you have a sole proprietorship.
Can an LLC be an S-corp?
Yes. An LLC is a business entity created by filing Articles of Organization with the state. An S-corp is simply an IRS tax classification that LLCs (and corporations) can choose if they meet the requirements. In many cases, an S-corp election can save LLCs money on employment taxes.
Can an LLC help me live more privately?
Yes, forming an LLC can help reduce your public footprint. This will require taking certain steps — like hiring a registered agent service — to keep your personal information off public filings.
What is a foreign LLC?
A foreign LLC is a limited liability company registered to do business in a state other than its home state — also called foreign qualification. Your LLC will need a registered agent in every state where you do business.
Do LLCs pay taxes?
Yes and no. For an LLC with default tax classification, the company itself doesn't pay federal taxes — profits pass through to owners who report them on personal filings. However, LLCs may be required to pay various state taxes (such as franchise taxes), and LLCs that elect corporate taxation may owe taxes directly.
Do you accept Amazon Verification Cards?
As your registered agent, we allow use of our address wherever it is accepted. However, Amazon changed their Terms of Service to require additional documentation — such as utility bills — which registered agents cannot provide.
Can you file an LLC yourself?
Yes, you can file articles to form your LLC yourself. However, there are a few downsides to doing so.
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