There are a couple benefits of forming a limited liability company. An LLC is a business structure that allows for personal protection for the owner’s business debts. It is a similar structure to an S-corporation except that an LLC does not have to pay a corporate tax. Instead, an LLC acts as a pass-through entity, so the owner files business profits and losses on their personal income tax.

The steps to forming an LLC include:

1. Choose a name that has not been already taken an that will comply with your state’s LLC name rules;

2. File your Articles of Organization with the appropriate state office, usually the Secretary of State, and pay the required filing fees, which range from $100 to $800 depending on the state. In most states the office of the Secretary of State has the Articles of Organization already written for you, all you have to do is fill in your specific information;

3. Draft your LLC’s Operating Agreement, similar to a corporation’s bylaws. The Operation Agreement is a document that spells out the LLC member’s roles and responsibilities. You can find other LLCs Operating Agreements online and use them as a template for your own;

4. In some states it is required that you make an LLC’s existence publicly known. You can do this by taking out an ad in your local paper with your intent to form an LLC and with your registered LLC name;

When those steps are completed you have successfully formed your Limited Liability Company. Now you need to secure the proper business permits and licenses, like a business license, zoning permits, and a federal employer ID number.

And now you can start operating your new Limited Liability Company.

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