What’s Next After Forming an LLC?
Creating an LLC is not enough to legally open your doors for business. You also need to obtain a business license from your local government and file for incorporation with the state in which you plan to operate.
The LLC designation will protect your personal assets from creditors and lawsuits stemming from your business activities, but it does not exempt you from paying taxes or complying with other business regulations.
In short, LLCs are a key part of starting a legally-operating business, but they aren’t the only component.
After you form your LLC, there are a few things you should do to get started on the right foot.
Choose a Registered Agent
First, you need to choose a registered agent for your LLC. This is the person or company who will receive legal documents on behalf of your LLC.
They must have a physical address in the state where your LLC is formed and be available during business hours to accept service of process.
Set up an operating agreement
You also need to set up an operating agreement. This document lays out how your LLC will be run and outlines the roles and responsibilities of each member. It’s not required in all states, but it’s a good idea to have one in place to avoid any future conflicts.
Name your Business/DBA
Your LLC can be different from your marketing identity. For example, my business is called “Happy Acres”, but my LLC is called “Hale Acres Farm”. This can help protect your personal assets in case of a lawsuit.
There are a few things to consider when naming your business. You’ll want to choose something that is both trademark-able and memorable. But beyond that, you’ll also need to think about the legal structure of your company.
Whatever name you choose, make sure to do a trademark search to make sure it’s available and register your company with the state government. Good luck!
DBA
When you’re starting a business, one of the first things you need to do is register it with the state. This process is called registering your business as a “doing business as” or DBA. There are a few reasons why you might want to do this:
1) To protect your personal assets. If your business is sued, the court can go after your personal assets to pay off any judgments. However, if your business is registered as a DBA, then the court can only go after the assets of the business itself.
2) To make it easier to open bank accounts and credit lines for your business. When you register your business as a DBA, you’ll get an employer identification number (EIN) from the IRS. This number can be used to open bank accounts and apply for credit in your business’s name, rather than using your personal social security number.
3) To give your business a professional image. When customers see that your business is registered as a DBA, they’ll perceive it as being more legitimate than if it were just a personal business.
File for Employer Identification Number
Once your LLC is formed, you’ll need to file for an Employer Identification Number (EIN). This is a nine-digit number that uniquely identifies your business entity.
It’s used for tax-reporting purposes, and you’ll need it to open a business bank account and to do other things like hire employees.
You can file for an EIN online through the IRS website. The application process is pretty straightforward, and you should receive your EIN within a few weeks of filing.
Prepare right tax Information
After you’ve set up your LLC, the next step is tax preparation. You’ll need to file Form 1065 with the IRS to report your income and losses for the year. You’ll also need to issue K-1s to each of your LLC members, which will list their share of the profits and losses.
You may be able to handle most of this on your own, but it’s a good idea to consult with a tax professional to make sure you’re doing everything correctly. They can help you find any deductions or credits that you may be eligible for, and can ensure that you’re paying the least amount of taxes possible.
Create a business bank account
After you have created your LLC, the next step is to open a business bank account. This account will be used solely for your business transactions and should be kept separate from your personal finances.
When setting up your business bank account, you’ll need to provide your LLC’s EIN (Employer Identification Number) and some other basic information about your company. You’ll also need to choose a business name and designate a contact person who can act on behalf of the company.
Your bank will likely offer a number of different accounts types to choose from, so be sure to select one that fits the needs of your business. Some common options include: checking, savings, money market, and certificate of deposit accounts.
Get Online payment processors
Afer LLC, you’d need an online payment processors with two great options for online payment processing.
Find out ones that have a low processing fee per transaction, and they offer a wide range of features such as recurring billing, subscription management, and fraud protection. In addition, they also offer an automatic invoicing system which can be very helpful for businesses that need to send invoices to their customers on a regular basis.
Protecting Your Intellectual Properties
A trademark is a word, phrase, symbol, or design that identifies the source of a product or service. The purpose of a trademark is to prevent confusion in the marketplace. When you see the Nike swoosh on sneakers, you immediately know that they are Nike shoes.
A registered trademark provides the owner with nationwide exclusive use of the mark and can prevent others from using it without permission. The benefits of trademark registration include:
- Nationwide exclusive use of your mark
- Prevents others from using your mark without permission
- Can be used as a basis for obtaining federal court orders to stop counterfeiting and infringement
- Can be used as the basis for seeking monetary damages in federal court
Get a Business Credit Card
If you’re running a business, it’s a good idea to apply for a business credit card. This will help you keep track of all your business expenses and make things easier come tax time. Plus, if you have good credit, you may be able to get a lower interest rate on your business credit card than you would on a personal credit card.
To apply for a business credit card, start by doing some research to find the best deal for your needs. Then, fill out an application with the required information, including your business name and contact information. Once you’ve been approved for the card, start using it for all your business expenses. Remember to pay off your balance in full every month to avoid getting charged
Get Seller’s Permit
There are a few things you need to do in order to get a seller’s permit, including incorporating your business as an LLC.
Once you’ve done that, you can apply for a seller’s permit from the state in which you’ll be selling goods. The process and requirements vary from state to state, so be sure to check with your state’s requirements before beginning the application process.
Typically, you’ll need to fill out some paperwork and submit it to the appropriate office, along with any required fees. Once your application is approved, you’ll be issued a seller’s permit that will allow you to legally sell goods in your state.
Be sure to keep this number handy, as you’ll need it for all future transactions.
Insurance
There are a few types of insurance that are important for businesses to have. Business liability insurance protects your company from any legal issues that may arise, such as a customer getting injured on your property. Product liability insurance protects you if a product you sell causes harm to someone.
Property insurance covers damage to your building or property if something happens like a fire or theft. And finally, business interruption insurance will help you keep your business running if there is some type of interruption, like a natural disaster.
It’s important to work with an experienced agent who can help you find the right coverage for your business. They will ask about the size and nature of your business, as well as what could potentially cause damage or financial loss.
The bottom line
Forming an LLC is a great way to protect your personal assets and give your business a professional image.
