As a new business owner, you have to make some critical decisions for your business’s long-term growth. One of the most important decisions you have to make is determining the legal entity of your business.
Small business owners usually prefer Limited Liability Company over other legal business structures because of its unmatched benefits for new startups.
If you are interested in making an LLC for your business, you are probably wondering how long does it take to Form an LLC?
Read this guide to determine how long it takes to create an LLC.
How Long Does it Take to Form an LLC? Comprehensive Guide in 2022
- 1 How Long Does it Take to Form an LLC?
- 2 What is an LLC?
- 3 How to Create an LLC in Six Simple Steps
- 4 Another Option
- 5 Conclusion
How Long Does it Take to Form an LLC?
Everyone who is interested in forming an LLC wants to know How Long Does it Take to Form an LLC?
There are different laws, regulations, and time requirements for forming an LLC in every state. For instance, It takes 5 to 7 business days to form an LLC in Wyoming, whereas it can approximately take 9 to 11 weeks in Delaware.
According to our analysis of state-level data, forming an LLC takes 14 to 21 days in all 50 states. It is essential to know each stage of the formation process to estimate how long it will take.
This guide will help you know all the steps included in the formation process.
What is an LLC?
An LLC refers to a Limited liability company (LLC), a legal business entity recognized in 1977 by the Wyoming state.
Numerous benefits such as ease of formation, limited liability, separate legal entity, and various tax benefits make LLCs the most popular business structure in the United States.
How to Create an LLC in Six Simple Steps
Creating an LLC is straightforward if you have proper knowledge about the process.
Here are the steps you have to follow to form an LLC yourself:
- Select a State
- Name your LLC
- Appoint a Registered Agent
- File your Certificate of Formation
- Draft an LLC Operating Agreement
- Apply for your Employer Identification Number (EIN)
Select a State
The first thing you need to consider is the state where you want to form your LLC. It is also one of the crucial decisions for your business.
It is generally recommended to form an LLC in a state without state income taxes, then you’ll only be responsible for paying US Federal taxes.
Brief about the Best States to Form an LLC in the United States as a Non-Resident:
According to our experience in US Business Formation, 80% of business owners prefer Wyoming over other states.
Wyoming has a $100 state filing fee with a $50 annual fee. Wyoming does not require you to pay corporate or personal income taxes with 4% sales tax and offers you the most powerful asset protection.
Name your LLC
The first step to forming an LLC is to select a name for your LLC. Generally, you will need to follow this naming instruction:
- You must include the word limited liability company or LLC in your company name.
- You have to avoid restricted words such as a bank, trust, Law, Attorney, etc.
- You should not include such words in your company name that confuse your LLC with a government agency.
- I also recommend registering your LLC name’s web domain even if you do not want to create your business website today.
Appoint a Registered Agent
The next step to form an LLC is to appoint a registered agent. A registered agent is also known as a statutory agent or resident agent.
A registered agent is a person or a company who sends and receives legal papers on behalf of your LLC. These legal papers include official correspondence like legal summons and filing documents.
Your registered agent must be a resident of a state where you want to start your LLC. If your registered agent is an individual, then he will be a member of your LLC along with you.
File your Certificate of Formation
The next step you have to do is to file the formation documents with your Secretary of State.
It is also known by various names, most commonly this document known as Certificate of Formation.
To form your Limited Liability Company, you must file this document with your Secretary of State.
Draft an LLC Operating Agreement
An LLC operating agreement is a legally binding business document that entails the ownership of its members, how the company is managed, and the structure of the LLC or limited liability company.
It can provide details such as one meeting being held naming a registered agent, selecting managers, and adding and dropping members.
An operating agreement is not required in every state, but it is highly recommended to have an operating agreement to avoid internal disagreements between LLC members.
Apply for your Employer Identification Number (EIN)
The final step is to get your Employer Identification Number (EIN), also called a Federal Tax Identification Number.
An EIN is the business’s tax identification number, like a Social Security Number for individuals.
What are the Purposes of EIN?
- An EIN is necessary for your business tax purposes.
- It is also required to open a business bank account in the United States.
- It is also needed when you want to hire employees legally.
Applying for an EIN is quite simple and free of cost. You can quickly obtain this by visiting the IRS.gov website.
You’ve come to the right place if you’re thinking about forming your LLC with the help of a professional incorporation service.
Micahguru Formation is a U.S. incorporation company that helps founders and entrepreneurs globally to launch and manage their U.S. businesses remotely.
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Forming an LLC is one of the most important steps for your business, so I highly recommend you to get the help of a professional incorporation service or an attorney if you do not have much idea and you are unfamiliar with the process.