In the 90s, limited liability companies (LLCs) rose in popularity as the newest business entity structure available in the United States. Budding companies enjoyed the liability protection provided by this formation style because it keeps personal assets separate from business assets. This shield serves to prevent the total loss of an owner’s property to settle a debt, loss, or claim against their company.

While this sounds vaguely similar to how a corporate entity structure works, LLCs don’t have limitations on ownership, easier administrative requirements, and a simplified tax approach. The brief overview below covers what steps are involved in forming this business type, along with other elements to consider before choosing it for your own endeavours.

Navigating State Rules and Regulations Regarding LLCs

Every state has its own laws governing small businesses and their entity structures. For example, Kentucky requires an operating agreement to be filed with your LLC registration, but Louisiana does not.

This difference is apparent regarding annual reporting requirements, fees, and how Articles of Organization are registered. In addition, some states, such as New York, require you to publish a notice that runs for six weeks letting the public know about your new business.

Things get further complicated if you plan to form your business in a state other than where you reside or want to have multiple companies in different states. This typically requires you to file as a foreign entity and has additional registration requirements that must be followed.

Verify Your Business Name is Available

Don’t start printing business cards, registering domains, or creating anything with your company name on it until you confirm it’s available to use. States require you to have a unique name that another business hasn’t taken. A simple name search through your Secretary of State can help you determine availability. This is a crucial step to ensure you don’t infringe on someone else’s intellectual property or trademark.

Submit Your Articles of Organisation

While paperwork can vary state-to-state, every one of them requires you to submit an Articles of Organisation (also referred to as a certificate of such). If you are doing your LLC registration on your own, this is a document that will include the following information:

Name of your company Address

LLC member names and addresses

Your registered agent’s name and address

Filing this paperwork must be signed and submitted by your LLC members, and a fee paid to complete your registration to do business in your state.

Choose a Registered Agent

Except for New York, LLCs must have a registered agent in every other U.S. state. Depending on where your business is based, this individual may also be referred to as:

A statutory agent
A resident agent
An agent for service of process

This agent will serve as a third-party contact between your business and the state you are registered. Typically, their duties include accepting documentation sent by the state, will process these documents, and ensuring your compliance with local law.

If you want to save on cost and act as your own agent, this is perfectly legal. However, there are specific requirements you must fulfil to do so, including:

Being available during regular business hours

Be a resident of the state your business is registered

Have a physical address to receive mail (PO boxes are not permitted)

Be willing to accept paperwork that may be confidential in a public forum
Depending on which state your business is located, there could be other rules you must comply with to fulfil this role. Several agencies provide this service for $100 -$150 annually. It may be worth just letting a third-party handle this aspect of your LLC for such a relatively affordable cost.

Create Your Operating Agreement.

Visit your Secretary of State’s small business resources or call the agency directly to determine if your LLC will need to submit an Operating Agreement as part of the registration process. States like Louisiana don’t require this step. However, it’s strongly recommended you still have one in place. This documentation provides a clear outline of how your LLC is to run, which can help avoid disputes between members over the management of finances.

Get Insured!

Creating and running a successful business has its own share of challenges, so it’s essential that you have a risk management strategy in place that includes business insurance for your company. While the coverages you choose will depend on the industry your company operates, many insurers offer a Business Owner’s Policy (BOP) that covers the basics and additional customizable coverages:

General Liability
Commercial Auto & Property
Tools & Equipment
Errors & Omissions
Business Interruption
Workers’ Compensation
These commercial policies provide greater levels of coverage when bundled, so you never have to worry about your business suffering a catastrophic loss and being unable to recover. Remember, it only takes a single lawsuit or natural disaster to lose everything. Being prepared with a comprehensive insurance plan can make it possible to rebuild and recover.


The basic overview of the LLC formation process in this article should provide you with enough insight to better understand what it takes to get your business off the ground. You will still be responsible for additional permits, licensing, and any required financial accounts to comply with local, state, and federal law. So, be sure to form relationships with advisors you trust to ensure your company is on the right path to success.