The United States has seen some turmoil in its economy, but this has not impacted how many businesses are being started. In fact, the country’s post-pandemic performance has been impressive considering its challenges. Data from USChamber.com shows that 2021 saw a record number of new business applications at 5.4 million.
Entrepreneurs need to make sure they make use of all the best safeguards to minimize risk when pursuing business opportunities. Limited liability companies (LLCs) are a good way to go about this as they are simple to form and protect your personal assets. That being said, you may be wondering if you need an attorney to set up your own LLC.
Do You Need an Attorney to Set Up an LLC?
You do not actually need an attorney to set up an LLC. There is no legal requirement that would stop you from starting your own business in the United States without an attorney. As long as you follow the proper procedures and file for the right paperwork in your state, you should be able to launch your business.
Of course, having an attorney while starting an LLC may still prove to have its own benefits. It can even simplify the process for you if you are dealing with many products or services that have their own restrictions and guidelines in the country.
Benefits of Having an Attorney When Forming an LLC
Although you are not required to have an attorney when forming an LLC, having one can help you navigate the responsibilities that do apply to you during this process. After all, having an LLC structure doesn’t mean that you are completely free of liability. An attorney will also likely be familiar with the specific laws in your state that may apply to your business.
This can help when you are trying to figure out business ideas that can improve your long-term plans and costs. Business or corporate attorneys are also well-versed in the general requirements of business operation, so they can help you when drafting your operating agreement. In terms of paperwork, they can guide you on the necessary filing. Finally, they can also provide insight into any potential disputes that you’ll need to consider when starting an LLC.
What You Need to Form an LLC
Whether or not you have an attorney, you will have to know the requirements that you must meet or accomplish to form an LLC. According to LLC.org, the exact steps will depend on the state that you reside in. There are guides available there per state, but you can generally expect certain steps to be present regardless of where you establish your business.
The first step after establishing your LLC’s name is to get a registered agent. You cannot legally operate in any state without one. Afterwards, you will need to file Articles of Organization with your Secretary of State. This will allow you to be officially recognized by the state for operation. For taxation, you will need to get local business licenses and an Employer Identification Number (EIN) with the IRS.
You can also make an operating agreement to make your business planning smoother. Although this is usually an optional step, certain states require one for them to process your application.
It is usually recommended that you form an LLC in your home state as it is more convenient and potentially less costly. That said, a review of the best states for LLCs on TheBalanceMoney.com found that the most promising states in 2023 are Alaska, Delaware, Florida, Indiana, Montana, Nevada, New Hampshire, North Carolina, South Dakota, and Wyoming. These results stem from their filing fees, tax rates, and annual fees.
