Starting an LLC is a popular option for many entrepreneurs who want to protect their personal assets while enjoying the tax benefits of a partnership.
However, one of the most common questions that people have is how long it takes to start an LLC. The answer to this question can vary depending on several factors, including the state where you are forming your LLC and the type of business you are operating.
Typically when I have done it – using an LLC formation service – it has taken an hour to input all the information and then a few days for the state to process it.
Generally speaking, it can take anywhere from a few days to a few weeks to start an LLC, depending on the state where you are forming your LLC and the level of expedited processing you choose.
The process of starting an LLC typically involves several steps, including choosing a name for your business, filing the necessary paperwork with the state, and obtaining any required licenses and permits. Additionally, you may need to publish a notice of your intent to form an LLC in a local newspaper, depending on the state where you are forming your LLC. Each of these steps can take some time, so it’s important to be aware of the timeline involved in starting an LLC.
Some states, such as New York and Nebraska, require you to publish a notice of your intent to form an LLC in a local newspaper, which can add several weeks to the process. However, in many cases, you can complete the process of forming an LLC in just a few days by filing your paperwork electronically and choosing expedited processing if it’s available.
The quickest way to form an LLC is to use a respected LLC formation service such as one of the recommendations below.
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Choosing a Business Name
When starting an LLC, choosing a business name is an important step. The name you choose will represent your company and brand, so it’s important to choose wisely.
You can check the availability of your desired name by visiting your state’s business filing agency website. Once you have a list of potential names, you’ll need to choose the one that best represents your brand and business. Consider the type of products or services you offer, your target audience, and your company’s values and mission.
You’ll want a name that is unique and memorable, and that stands out from your competitors. After you’ve chosen a name, you’ll need to register it with your state. This process can take anywhere from a few days to a few weeks, depending on your state’s processing times.
Some states allow you to reserve a name for a certain period of time before officially registering it, which can be helpful if you need time to finalize your business plans.
Registering Your LLC
Registering your LLC is a crucial step in establishing your business. It involves several steps, including filing articles of organization and obtaining business licenses and permits.
The time it takes to complete this process can vary depending on the state in which you are registering your LLC and the type of business you are operating. See here for costs involved and processing times in each state.
Filing Articles of Organization
The first step in registering your LLC is filing articles of organization with the state in which you are operating. This document outlines the basic information about your business, such as its name, address, and purpose. It also establishes your LLC as a legal entity.
The time it takes to file articles of organization can vary depending on the state in which you are operating. Some states offer online filing, which can expedite the process.
For example, in California, you can file articles of organization online and receive approval in as little as 24 hours. In other states, such as New York, the process can take up to 20 business days.
Obtaining Business Licenses and Permits
Once you have filed articles of organization, you will need to obtain any necessary business licenses and permits. These requirements can vary depending on the type of business you are operating and the state in which you are operating.
For example, if you are operating a restaurant, you will need to obtain a food service permit. If you are operating a construction business, you will need to obtain a contractor’s license. The time it takes to obtain these licenses and permits can vary depending on the state and the type of license or permit required.
It is important to research the specific requirements for your business and state to ensure that you obtain all necessary licenses and permits in a timely manner.
|State||Filing Time for Articles of Organization||Time to Obtain Business Licenses and Permits|
|California||24 hours||Varies depending on the type of business|
|New York||Up to 20 business days||Varies depending on the type of business|
|Texas||Varies depending on the type of business||Varies depending on the type of business|
Obtaining an EIN for your Limited Liability Company
One of the most important steps in starting an LLC is obtaining an Employer Identification Number (EIN) from the Internal Revenue Service (IRS). The EIN is a unique nine-digit number that identifies your business for tax purposes.
There are several ways to obtain an EIN, including online, by mail, or by fax. The fastest and easiest way to get an EIN is to apply online through the IRS website. This process can take as little as 15 minutes, and you will receive your EIN immediately upon completion of the application.
If you choose to apply by mail or fax, the process can take longer. According to the IRS, it can take up to four weeks to process a mailed application and up to four business days to process a faxed application.
It’s important to note that you should apply for an EIN before you need it. If you wait until the last minute, you may not receive your EIN in time to meet important deadlines, such as filing your tax return or opening a business bank account. The IRS recommends applying for an EIN at least four to five weeks before you need it.
Once you receive your EIN, be sure to keep it in a safe place. You will need it for a variety of business purposes, including filing tax returns, opening a bank account, and applying for business licenses and permits.
In summary, obtaining an EIN is a crucial step in starting an LLC. While the process can take as little as 15 minutes if you apply online, it’s important to plan ahead and apply for your EIN well before you need it to avoid any delays or complications.
Creating an LLC Operating Agreement
After registering your LLC (limited liability company), the next step is to create an operating agreement. This is a crucial document that outlines the financial, legal, and management rights of all members of the LLC. It can include how profits and losses will be allocated, how decisions will be made, and how the LLC will be managed.
The time it takes to create an operating agreement can vary depending on the complexity of the LLC and the number of members involved. Some LLCs may be able to create a basic operating agreement in just a few hours, while others may take several weeks or even months to finalize.
It is important to note that some states require an operating agreement to be in place before the LLC can be legally formed. Even if your state does not require it, having an operating agreement can help prevent disputes and ensure that everyone is on the same page when it comes to the management of the LLC.
When creating an operating agreement, it is important to consider the needs and goals of all members involved. This may involve negotiating and compromising to come up with a document that everyone can agree on. It is also important to consult with a lawyer or other legal professional to ensure that the operating agreement is legally binding and enforceable.
Opening a Business Bank Account
After completing the necessary paperwork and filing for your LLC, the next step is to open a business bank account. This is an important step that will help keep your personal and business finances separate. It is also necessary for tax purposes and to establish credit for your business.
When opening a business bank account, you will need to provide documentation to the bank. This documentation typically includes:
- Articles of Organization
- Employer Identification Number (EIN)
- Business license and permits
- Operating agreement
- Identification documents such as driver’s license or passport
It is important to research different banks and compare their fees and services before choosing one. Some banks charge a monthly fee for business accounts or have a minimum balance requirement. Others may offer special promotions or benefits for small businesses.
When meeting with a banker, it is important to ask questions and make sure you understand the terms and conditions of the account. You may also want to inquire about additional services such as merchant services, online banking, and mobile banking.
The process of opening a business bank account can take anywhere from a few days to a few weeks, depending on the bank and the completeness of your documentation. It is important to plan ahead and allow enough time to complete this step before you start accepting or spending money as your business.
We recommend Mercury Bank as the best option for an online banking account. We’ve banked with them for a long time and can vouch for their customer service and product offering.
Starting an LLC is a multi-step process that can take anywhere from a few days to several weeks, depending on the state in which you are forming your LLC. The process involves several steps, including selecting a name for your LLC, filing articles of organization with the state, obtaining any necessary business licenses and permits, and creating an operating agreement.
Once you have completed all of the necessary steps, you can expect to receive approval from the state within a few business days to a few weeks. Some states may offer expedited processing for an additional filing fee, which can help speed up the process.
It is important to keep in mind that the time it takes to start an LLC can vary depending on a variety of factors, including the state in which you are forming your LLC, the complexity of your business structure, and the availability of necessary documents and information.
Overall, starting an LLC can be a straightforward process that can be completed relatively quickly, especially if you are prepared and have all of the necessary information and documents ready to go. By following the steps outlined in this guide and working with a reputable service provider, you can ensure that your LLC is formed quickly and efficiently, allowing you to focus on growing and managing your business.