How do I get an LLC license

It takes time to learn the lingo when approaching a new venture, so don’t feel bad if your question “How do I get an LLC license?” is not technically accurate. An LLC is actually a type of business entity (such as a corporation or partnership) rather than a license. However, licenses are essential to your business. Let’s take a look at how to start your LLC and determine what licenses it needs.

Loved your LLC

In this process, it can help to think of your limited liability company (LLC) as a baby. The LLC is the legal entity itself, which you create by filing paperwork with your state. Instead of a birth certificate, this paperwork is usually referred to as your LLC’s “Articles of Organization” (although some states use the term “Certificate of Incorporation” or “Certificate of Organization” instead).

The state (such as a hospital) will charge you a fee for this, which you can look up on our LLC fees page.

Name your LLC

However, before you get your articles of incorporation, you need to name your “baby” by naming your LLC. It must comply with your state’s rules for naming LLCs. These vary by state, but you can count on your state requiring your LLC’s name to be different from all other business names in your state.

You must also include an “designator” in your business name that identifies it as an LLC. These also vary by state, but most states accept “limited liability company,” “LLC,” or “LLC”

Name a registered agent

You must also appoint a registered agent. If a litigation server or the state needs to reach your LLC to deliver litigation for a lawsuit or other official notices, they must be able to personally deliver the notice to a person or company that will deliver the notices on your behalf. That person/or company is known as a registered agent and every LLC is required by law to have one.

Prepare an LLC business agreement

While operating agreements are not required by law by all states, it is highly recommended that you create an operating agreement to establish the rules that will govern your LLC’s business structure. An operating agreement puts in writing how much of the company each member (owner) owns; how the company will be managed; how the profits are divided and distributed; what happens if a member leaves or has to be removed; how the company is dissolved; and much more.

Get an EIN from the IRS

Instead of a social security number, your “baby” (the LLC) will likely need an Employer Identification Number (EIN). This is a unique number that you get from the IRS and you need it to open a business bank account or hire employees. It is also a requirement if your small business has more than one owner. You use this number when filing taxes.

Preparing Your LLC: Securing Licenses and Permits for Success

Just like preparing a nursery for your new baby, getting licenses and permits is an essential step in starting an LLC. This process ensures that you create a safe and compliant environment for your business to thrive and grow. Without the proper licenses and permits, you could face fines, loss of reputation, close your business temporarily or permanently, or even lose the liability protections and tax benefits that an LLC would otherwise provide.

So, how do you know which licenses you need? Here’s where it gets complicated. The kind of license you need varies by location; federal, state, county, and city may all have specific requirements. Another variable is your industry. Licenses for a restaurant will be very different from licenses for a home consulting firm.

Some of the additional licenses an LLC may need include:

• General business license – In some locations, you must have a separate license to do business at all. This is often done at the county or city level, but some states also require a general business license.

• Professional license – Certain professions, such as medicine, law and engineering, require up-to-date professional licenses to work legally.

• Employment opportunities – Companies with employees will have to sign up for things like unemployment insurance and workers compensation.

• Authorization from the seller – Most states require this license for your LLC to collect sales tax on goods you sell.

• Health – If you serve food, you will probably need a health inspection certificate.

Those are just a few. Depending on the type of business, an LLC may also require an alarm license, weights and measures registration, and other permits/licenses if it is a beauty salon, daycare, sells firearms or liquor, etc. There are also taxes you must pay to get you to register, depending on your location.

So, how are you supposed to know if you have all the licenses your LLC needs? A business license report can help.

We’ve partnered with Avalara to help you conduct a federal, state, county, and local search, based on your business activities and location, and find all the permits, business licenses, and tax records you need to operate legally. They then finalize those applications and send them to you as a business license report with instructions on how to complete them and where to send them once completed.

Disclaimer: The content on this page is for informational purposes only and does not constitute legal, tax or accounting advice. If you have specific questions about any of these topics, seek advice from a licensed professional.