If you are thinking about setting up your own LLC, you’ll need to know how long it takes to form it.
The process can be completed in about two to four weeks in all states. But with various requirements, the time varies from state to state. You may choose to hire the services of an attorney or law firm to assist you in meeting all the requirements before you apply for it or you can do it yourself.
Today we are going to discuss how long it takes to get an LLC and what goes into this process.
What is an LLC?
An LLC stands for limited liability company. This is an independent legal entity created to offer its owners protection from personal liability. This means that your personal assets are protected if your business is sued or defaults on a loan.
You don’t have to worry about creditors taking your things since everything you own is usually kept separate from the company. You can expand your business without worrying about this.
LLCs can be formed in all 50 states and can include any number of members. There are no restrictions on who can form an LLC; individuals, corporations, trusts, and even other LLCs can all join together to form one.
Other Advantages of a Limited Liability Company include:
Pass-through taxation - The company does not pay taxes at the corporate level; instead, all profits and losses are passed through to individual members and taxed at each member's personal income tax rate. This eliminates double taxation, which occurs when corporations pay taxes on income before profits are distributed to shareholders.
Flexible profit distribution - Profits can be distributed according to the percentage of ownership in the company or any other method agreed upon.
Forming an LLC is not that difficult, but it depends on the state where you're doing business. And while the process is often pretty quick, it can take longer if there are complications or errors with your legal documents.
It is not a must to hire an attorney to form an LLC in any state, but some states offer expedited processing if you hire one. The process is straightforward and can be done entirely online and without ever visiting your state's capital.
How Long Does it Take to Get an LLC?
On average, the time required to form an LLC is 3 to 4 weeks but varies by state. Most states require you to submit an Articles of Organization form along with a filing fee ranging from $10 to $500.
Some states require additional documents, like an Operating Agreement, which can add several days to the process.
In addition to state filing requirements, each state has unique guidelines for choosing a company name so it can take some hours or days to come up with one. You will also need a registered agent though you can name yourself as a registered agent.
A registered agent must agree to receive legal documents on behalf of your company and be available during normal business hours at their listed address. Choosing your registered agent information also takes time, so plan ahead.
To truly understand the processing time, you need to familiarize yourself with the process of creating an LLC which I will discuss in the next section.
If you’re in a rush to form your LLC, you may be able to expedite your application, but at a certain cost. Expedited or rush processing is available in most states which will significantly reduce the timeframe for forming an LLC.
This option will help form your limited liability company immediately but will require an additional fee:
$50 - Expedited Processing (1-3 business days)
$100 - Rush Processing (24 hours)
$200 - Same Day Processing (same day)
$500 - Emergency Filing (2 hours)
Top 6 Steps to Create a Limited Liability Company
I've been working with small and medium businesses for more than a decade, and I've helped hundreds of businesses get up and running. So I know the ins and outs of forming an LLC. I will walk you through the entire process here.
1. Name Your Business
First and foremost, you need to give your business a name that follows your state’s guidelines for LLCs. In most states, you can do a quick search through their website to see if the name is available.
Your LLC's name must include a word or phrase that designates it as a limited liability company. In most states, this means words like “limited liability company” or an abbreviation such as LLC.
You must also check your state’s LLC records to make sure there isn't already an existing LLC with the same name as the one you want to use. Even if that other LLC is located in another state, having a similar name could cause confusion and complicate your business operations. Depending on your state, the fee for this search ranges from $5 to $25.
Some states require you to include a “descriptive term” in your name. For example, words like insurance, attorney, or mortgage if you're offering those services in your business. Your state will also have rules about whether or not you can use words that imply government affiliation.
2. Appoint a Registered Agent
A registered agent is required in every state. They are the people or company who will receive important documents from the state on behalf of your LLC (such as annual report requirements and tax forms). They will also be served any legal paperwork in the event that your LLC is sued.
This person must be available during standard business hours (9 am-5 pm) at a physical address located within the same state where you plan on creating your LLC.
Here are some of the best formation services and registered agent services out there. Here are some of the most reliable:
Trusted Business Formation Services
Despite only doing business since 2015, their 100% positive reviews are speaking for themselves. Swyft Filings offers one of the best refund policies in the industry. On a bonus side the company also has no processing or cancellation fee for your refund. It is a great company to consider when looking to designate a registered agent service for your business.
BizFilings takes you through the whole process from quality check to post-incorporation and also offers on-going support. You can choose various payment plans based on the features you want and your budget. The features in the higher-end packages are also available in the lower-end packages but at an additional fee. With an A+ rating with the BBB, BizFilings is a trusted online formation service.
When compared to other formation services, SunDoc Filings provides volume discounts for multiple states and entities and equally amazing customer support. However, if you want a service that will save you money, you may find other services in the market that cost less. Also, you may not choose SunDoc Filings if you are looking for a service with payment packages with tons of features and free registered agent service.
This is one of the most reputable companies you can pick as your registered agent service. Inc Authority has enough experience in the field, having been founded in the 1980s. Its free payment package stands out in what they offer. Loads of positive customer reviews speek for themselves how satisfied and happy with their services and their LLC formation speed their clients are.
MyCorporation is known for offering a fast LLC formation process. If you wish to speed up the process turnaround time, you can use their expedited service, reducing the process from weeks to a few days, thoug for a fee. Nonetheless, MyCorporation is an excellent pick as your registered agent. It offers numerous payment packages with various features depending on your budget.
3. Obtain and complete Your State’s LLC Articles of Organization
Your Articles of organization, sometimes called a Certificate of Formation or Certificate of Organization is the document that officially creates your LLC in your state.
Your state provides a form for this purpose, so all you have to do is download it, fill in the required information, and submit it. If you want help with this process, there are plenty of legal services that can assist you.
The form is typically simple but does require information such as:
- The LLC's name and business address
- The name and address of the registered agent
- The purpose of the company
- The LLC’s duration
- The management of the LLC
4. File the Articles of Organization
You must then file the completed Articles of Organization with the appropriate state agency and pay any required filing fee. The cost varies by state, ranging from $10 to $500.
File Articles of Organization at the state level
LLCs are formed at the state level and each state has different requirements. You can view the specifics for your state’s filing procedures on the website of the Secretary of State or Department of State. Most states allow you to create an LLC by filing the Articles of Organization online, but some states will require a mail-in application or in-person filing.
For example, in Washington State, you can file online with the Secretary of State and pay a $99 fee. In New York, you can mail in a paper application to the Department of State and pay a $200 fee.
If you are forming an LLC as a foreign entity (meaning that you do not live in that state), there is usually an additional fee for filing as a foreign entity, which varies from state to state.
When your Articles are approved, you will receive a certificate confirming that your LLC has been established.
5. Form an LLC Operating Agreement
An operating agreement is a legal document outlining how your business will be run, much like a corporation's bylaws or a partnership agreement.
It includes important details such as member responsibilities, allocation of profits and losses, voting rights, and more. Even if your state does not require an operating agreement, it is a good idea to create one because it helps establish the internal procedures of your LLC.
Ensure your LLC members sign the agreement so there is no confusion about what was agreed upon.
6. Register for an Employer Identification Number (EIN)
Finally, you will need to register for an Employer Identification Number (EIN) or a tax id number with the internal revenue service or IRS. This can be done online or over the phone in just minutes. An EIN is a nine-digit number used by the IRS to identify a business entity.
Is an LLC Easy to Start?
Yes, the process of forming an LLC is easy. You don't need to be a business or legal expert to form and operate an LLC. In fact, forming an LLC is so simple that most people do it themselves.
The hardest part of forming an LLC is deciding what to name it. Once you have a name in mind, the actual formation process does not take long.
Independent Legal Entity Created
Creating an LLC allows your business to create contracts with other businesses or individuals as a separate entity in and of itself. Your company can open bank accounts or business credit cards under the name of your LLC. You may want to consider creating an LLC if;
- You want to take advantage of pass-through taxation
- You want to protect personal assets from business debts and lawsuits
- You want to establish your business as a separate entity
How long does it take for an LLC to be approved in PA?
According to the department of state of Pennsylvania, It takes 15 days for an LLC to be approved in PA. This is the average time it takes to process your application and get your documents in the mail.
If you need your business up and running sooner, we recommend selecting expedited filing.
How long does it take for an LLC to be approved in NC?
The North Carolina LLC filing process takes 7 to 10 days if you do it online. When you receive a confirmation that your LLC has been registered, open a business bank account for your LLC.