POST-FORMATION STEPS

You're all registered. Now what? Don't worry, this isn't rocket science. Here's a simple breakdown to get you started.

Congratulations on forming your LLC! Now, let's take your business to the next level by getting all essential documents and compliance filings in order. One of your first steps is to create an operating agreement. This crucial document outlines the ownership and member duties of your LLC, setting the stage for smooth operations and preventing potential disputes.

Whether you draft the operating agreement yourself or hire an attorney for expert assistance, having one is essential. States like California, Delaware, Maine, Missouri, Nebraska, and New York legally require an operating agreement, but it's a wise move for every LLC, no matter where you're located.

Stay organized by setting up a digital folder or physical file for your important business records. Some states may require you to publish a notice about your business formation in a local newspaper or file initial reports. And don't forget, starting in 2024, the federal government mandates all LLCs and corporations to file a Beneficial Ownership Information Report (BOIR). This new requirement aims to combat money laundering and financial crimes by collecting information about individuals with significant ownership or control of the company.

For the latest and most accurate information on required filings, your Secretary of State's website is an invaluable resource. Many services offer convenient packages for essential LLC documents and compliance filings, including the BOIR, ensuring your business remains protected and in good legal standing.

An Employer Identification Number (EIN), also known as a Federal Tax ID Number, is a crucial identifier assigned by the Internal Revenue Service (IRS) to businesses. This number is essential for various business activities, particularly for opening a business bank account and hiring employees. While solo business owners without employees can use their Social Security Number (SSN) instead, having an EIN offers added security by protecting personal information.

Applying for an EIN is straightforward and can be done directly on the IRS website, where you can receive your EIN immediately upon completion of the application. This number not only facilitates compliance with tax obligations but also helps safeguard your personal identity by reducing the use of your SSN in business operations.

Opening a business bank account is a critical step in separating your business finances from your personal assets. This separation simplifies record-keeping and tax preparation while protecting your personal finances. To open a business bank account, you will need your Employer Identification Number (EIN) and the certificate of business formation from the Secretary of State. Business checking accounts often have monthly fees, so it is wise to compare different banks to find the best rates.

Additionally, applying for a business credit card can be beneficial. A business credit card helps establish your business’s credit history without affecting your personal accounts, further separating your business expenses from personal ones.

A business bank account also enhances your business's credibility, allowing you to accept credit cards and checks in the business's name. Importantly, it helps protect your limited liability by preventing the mixing of personal and business finances. This protection, known as the corporate veil, ensures that your personal assets are safeguarded if your business faces legal issues or debt. Opening a business bank account before starting operations is essential to maintain this protection.

In today's digital age, having a business website is essential for any business, regardless of size. The first step in building your website is securing a web domain name. Securing your domain early prevents others from acquiring it and establishes your online presence.

A business website offers numerous advantages, such as improved exposure and streamlined business operations. It provides a platform for potential customers to find information about your products or services, enhancing your visibility and credibility. Additionally, a website allows you to engage with your audience through various digital marketing strategies, ultimately driving growth and success for your business.

Setting up a website is not just about being present online; it's about leveraging the internet to create opportunities and efficiencies that can propel your business forward.

Don't wait until tax season to find an accountant for your new business. Getting your books in order sooner rather than later will help you when tax season rolls around, and you can also learn how to set up your company in a way that maximizes tax savings. Both LLCs and corporations have choices that affect their federal taxes, and an experienced tax expert can help you maximize tax benefits. An accountant can also recommend business deductions and ways to save money throughout the year.

Many small business owners plan to do their own accounting to avoid paying for professional services. However, hiring an accountant can save you money, stress, and potentially legal troubles in the long run. If you want to keep track of your LLC’s finances yourself, exploring the best accounting software is a good start.

By setting up your accounting processes early and enlisting expert help, you set your business up for long-term success and peace of mind.

Before you start operating your business, it's crucial to ensure you have the appropriate business licenses and permits. The type of business license you need will depend on the nature of your business and your location. Start by contacting your city or county's business licensing department for information on obtaining a license application.

In addition to city or county licenses, you might need to contact federal, state, and local government offices to learn about any required professional licenses and local taxes you might have to pay. Requirements can vary significantly between states, counties, and even cities, and different types of businesses may have unique licensing needs.

Navigating the business license and permit landscape can be daunting, but it's an essential step to operate legally and avoid potential fines. There are three main licensing jurisdictions to consider: federal, state, and local. Taking the time to research and apply for the necessary licenses and permits will help set your business up for success from the start.

Starting a business is exhilarating, but navigating the legal aspects can be daunting. Many business owners make costly legal mistakes that could have been avoided with proper legal guidance. Seeking advice from a lawyer before signing contracts and hiring employees can save you from potential pitfalls.

A lawyer can help you avoid violating employment discrimination and independent contractor laws. They can advise you on the types of employee-related contracts needed to protect your business and its confidential information. Additionally, a lawyer can draft and review contracts, negotiate more favorable terms with your suppliers, and provide guidance on protecting intellectual property, such as logos or product designs.

A seasoned lawyer brings expertise to guide you through intricate state regulations and potential liabilities, ensuring your business structure aligns with your goals. Understanding when to seek professional counsel versus self-navigating the legal terrain can make or break your entrepreneurial journey. By getting legal guidance early on, you can focus on growing your business with confidence, knowing that your legal foundation is solid.

Congratulations on forming your LLC! Now that you’ve taken the plunge, remember that the journey has just begun. From organizing essential documents and setting up accounting processes to securing business licenses and seeking legal guidance, these steps will help ensure your business thrives. Stay proactive, keep learning, and don’t be afraid to ask for help when needed. Here’s to your success—let’s make your entrepreneurial dreams a reality!

Leer en español