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This post is a personal update on how and why I finally become an LLC. As my business has grown and evolved over the years, I’ve only done business under my name and personal Social Security number.
But with my transition from freelance writer to project manager I knew I wanted to take my business to the next level. I mean, who wants to keep giving out their personal SS number and name for everyone to have to access to?
The best way to protect my personal information was to become an LLC and file for a separate Tax ID number as Careful Cents, LLC.
The main reason I waited so long to do this is that three years ago I got remarried and then two years ago we moved to Colorado. I didn’t want to file for an LLC in Texas knowing that I would have to do it all again after moving.
So that’s why I waited a bit longer to become an LLC than I would have liked to — but it all worked out in the end!
Here’s the process I went through so you can understand how to form an LLC in your own state. It was super easy and the entire thing was done online within about 25 minutes!
Please note, I am a single-member LLC so in the eyes of the IRS I am still self-employed and will file a Schedule C with my personal income tax return.
1. Choose your LLC name
Every state has different requirements for doing business as a biz owner. So the first step is to go to the Secretary of State website for your particular state. This can be found doing a simple Google search and typing in “secretary of state for [your state]”.
For Colorado’s state website I clicked on Business Organizations and Trade Names, and then clicked on Starting a Business in Colorado.
You want to make sure that no one has already claimed your company’s name. Each state’s website will have a section to look up the Trade Names, so do this before taking the next steps.
In my case, no one owned Careful Cents, LLC so I was free and clear to continue moving forward.
2. File for Articles of Organization
Once you find your state’s website you’re going to navigate to the section that allows you to file for Articles of Organization for LLC, or Articles of Incorporation, or something like that. Again, it’s whatever your state requires for small business owners.
Thankfully, the Articles of Organization only cost $50 to file and I completed everything online within about 10 minutes.
The state of Texas (where I used to have file these things for my small business accounting clients), charges over $350 to file these documents. So my decision to wait a few extra years before filing as an LLC definitely paid off!
3. Designate a registered agent
Once you start filing in the information to become an LLC you’ll be required to designate a registered agent.
If you’re the only member of the organization (like I am) you’ll choose to be a single-member LLC. In other cases, you can also choose to be a multi-member LLC and be taxed as an S-CORP or corporation.
For my purposes, I’m keeping things simple and just input my own information as the registered agent. Once you’ve input the information of person forming the LLC, you’ll choose a the date you want this to take effect.
Please note that this can be up to 90 days delayed, in the event you have things you need to get together before the LLC takes effect.
4. Confirm the information and pay
Now you’ll review your information and pay to efile your documents. Make sure you turn on your printer so you can print out the documents and confirmation pages — or at least save them as a PDF file on your computer.
It’s important to know that you’ll need the Articles of Organization in order to file for an EIN (Employer Identification Number) with the IRS — which is the next step you’re going to take.
In addition, you’ll need this information to open a business banks account.
5. Apply for an EIN
Now that you have the official name of your LLC and the confirmation from the Secretary of State, you can file for a separate Tax ID number with the IRS. Start by going to IRS.gov and then clicking the link to Apply for an EIN.
You can apply for this online, and it’s totally free. Again, this makes it really quick and easy to make your business legit! #nomoreexcuses
Start the online application, using their EIN Assist, and then input your information and the details you just finalized as a new LLC. You’ll need to input the confirmation number from the Articles of Organization and then confirm.
You can choose to have these documents emailed to you, or receive a paper copy. I wanted them emailed to me so I could save them in my business files and then print them out as needed.
The Articles of Incorporation and the EIN are the only two documents you need if you want to become an LLC in your state.
You can then use these docs to open a business bank account, apply for a business loan, purchase office space, or whatever else you want to get your business going.
I hope my personal experience has helped you see how easy it is to become an LLC. Seriously, I don’t know why I waited so long.
Now you can level up your business and feel like a real business owner!