Forming an LLC

Starting a business is not as easy as it may sound, but it is achievable with proper guidance and enough basic knowledge. Aside from doing your market research and creating a business plan, another crucial decision you need to make is deciding which business structure you will take on. Over the years, LLC or Limited Liability Company is the type of business structure that has gained popularity, especially for start-up businesses.

What is an LLC?

Compared to the other business structures, LLC is relatively new in the US. The first formal LLC was enacted in 1977 in Wyoming. This business structure combines the beneficial features of a partnership and corporation based on the 1982 German Code and the Panamanian LLC.

From then on, states all over the country have modified the act and passed legislation to achieve the current LLC form of today. LLC is a business structure that carries selected features of a corporation and a partnership.

It is designed to benefit from the pass-through taxation feature of a partnership while having flexibility in management. All these are present in an LLC while having limited liability, like in a corporation.
How to form an LLC

Although forming an LLC may sound difficult, it is not an impossible task. Here is a guide you can look into on how to form an LLC.

Filing for Articles of Organization

This first step in forming an LLC is filing for the Articles of Organization, the form used to create an LLC. These forms are filed with the Secretary of State.

Registering an LLC Name

Choosing a name as well as registering it as an LLC can be quite tasking. Each state requires business entities' names to be unique. To avoid this hassle, do a business name search to check if your desired name does not exist in the system. Continue to work on it until you find one that is unique.

Main Office and Registered Agent

It is a requirement that an LLC should have a physical address where it is formed. This can be a home address or an address where the business records are stored. In addition, it also requires a registered agent, which is a person or company with a physical presence in the state. This is essential for receiving legal documents, tax notices, summons, subpoenas, etc., on behalf of the LLC.

The Cost

Often likened to a DBA or “doing business as,” LLC fees vary from one state to another. The cost can range between $40 and $500 per state. However, from a DBA vs LLC cost perspective, it’s more costly to file an LLC than a DBA. Nevertheless, the limited liability protection may make it worthwhile. You might be wondering how much does an LLC cost in Utah, if you’re planning to start a business in the state, the fee is as low as $70 in filing for Articles of Organization and there will be additional fees for other requirements. Although, you can look for the Idaho business entity search that provides a special feature in just a few minutes for as little as $0+ state fee. Namely, a business search function that enables anyone to search for information on any LLC, partnership, or corporation in this state.


Finally, LLC can be managed in two ways: a member-managed LLC or a manager-managed LLC. Most LLCs that exist today are member-managed.

With many things to consider and decisions to make, starting a business can be a life-changing event. However, it is also something that can be worthwhile. Learning and understanding how to start a business is one key factor in achieving your goal.