How Long Does it Take to Create an LLC?

Although it can be thrilling to start a business, in certain states, the process of filing LLC paperwork is lengthier than one might think.

Unfortunately, trying to work with government agencies isn't the most fun as there are often unknown delays. Keep reading to get all the details about LLCs - from how to form one to approximately how long the process takes.

Timeline to Create an LLC

The timeframe for creating an LLC differs by state but is usually completed within seven to fourteen business days. Factors such as how quickly the state processes business filings will affect the amount of time it takes to finish forming an LLC.

During the busier times of the year, it can take longer to file your LLC, so be sure to plan ahead. The beginning and end of the year are particularly busy.

If you need your application processed more quickly, you can request expedited processing for an additional fee. The amount of the fee varies by state, but requesting expedited processing can reduce your wait time to a few days.

By requesting expedited processing, you are essentially asking for your application to be reviewed before anyone else's. It's important to remember that not all LLCs are automatically approved; if required documentation is missing or business name requirements aren't met at the state level, for example, then approval may be denied.

What Is an LLC?

An LLC, or limited liability company, is an entity regulated by state law. All states in America have enacted legislation for these entities.

The people who own an LLC are known as members, and the company is usually managed by one of those members or a bigger group. It's similar to how shareholders have limited liability in a corporation. The amount of money that each member invested is generally the only thing they're liable for if something goes wrong with the company.

Although every state has different ordinances and prerequisites for constructing an LLC and processing the appropriate paperwork, you can submit the documents either online or by mail.

How Much Does an LLC Cost?

You must submit payment for the filing fee, which starts at $100 and goes up to $1000, depending on the state in which you file your LLC forms. The state will only process your LLC articles of the organization once they have received full payment.

Depending on the state you are filing in, LLCs can often be created by simply filling out a one-page form called the articles of organization or certificate of organization, along with paying the state filing fee.

Tax Structure of an LLC

Your LLC will be structured to look like a corporation after it is officially filed. You benefit from a corporation's limited liability protection while also getting the most basic level of taxation benefits found in partnerships.

Steps to Forming Your LLC

LLCs have to take a few steps before they can start operating. You need to file articles of organization with the Secretary of State, which is paperwork that gets approved after processing.

Picking a name for your business is also required and should be done beforehand.

An operating agreement is beneficial to draft even if your state does not require it, as it will act as a legally binding document specifying how decisions are made and other key business operations. This includes important things such as management decisions surrounding the finances of the company.

You will need to acquire an Employer Identification Number (EIN) from the IRS for forming an LLC and business purposes. This number is mandatory to open a business bank account and credit cards and create payroll for employees.

Depending on the business sector you're in, you might also need to get certified or have a permit. Be sure to take a look at the state and local business laws for details about this.