I Have an LLC, Now What? Crucial Steps After Forming an LLC

Starting an LLC is an accomplishment in itself, especially after you receive your official business name and completed forms. What comes next? Yes, you have an LLC, but that is only the first step out of many. There are numerous things you should tackle after your LLC is formed. These next steps are vital for your company’s revenue, growth, and legal protections. This guide will help you understand all the steps you need to take next.

What are the Responsibilities that Come with an LLC?

Having an LLC means having an extra layer of legal protection for your personal assets. It is important that you have an LLC in place and that the business operates under that structure. This requires you to keep official business records and maintain separate business finances. Having an LLC means having to take your business and the protections afforded to you seriously.

Business Identification/Tax Number

You will need to secure an Employer Identification Number (EIN). This number is used to verify your business documentation and is required for activities such as opening business bank accounts and filing taxes. The application process is free and only takes about 10 to 15 minutes. This is especially important if you do not have any employees, but you should definitely apply for an EIN to protect your personal Social Security Number.

Create Your Operating Agreement for Your LLC

There are many advantages to creating an Operating Agreement for your LLC. Even though many states do not legally require an Operating Agreement, many owners miss out on the protections it provides. This Agreement should outline ownership, profit allocation, and decision-making structure, and describe what happens if a member leaves the LLC. This Agreement is useful for single-member LLCs, as it reinforces the separation between the owner and the business if ownership is challenged during a legal dispute.

State and Local Business Licenses

Once an LLC is formed, it does not automatically grant the owner the ability to conduct business legally. Depending on the location and industry of the business, multiple licenses may be required, including:

• A business license, which may be issued by the county or city where the business is located
• Industry-specific licenses and permits (which may include food service permits, construction permits, healthcare permits, etc.)
• A sales tax permit
• Professional licenses, which would be required of the owner if the business is a legal or accounting practice.

To understand what is needed in each state or community where a business is located, check with the local and state governments.

Business Bank Account

This is very important. If there is a lawsuit and an owner has mingled business and personal funds, the owner’s personal assets may lose the protections that the owner relied on the LLC to provide. To prevent assets from becoming exposed, the owner must open a business bank account as soon as the LLC is formed. To create this account, bring your Operating Agreement, LLC formation documents, and your Employer Identification Number (EIN).

Business Accounting and Bookkeeping Systems

Having a clean set of books helps your business save during tax season and helps remains audit-ready. You have three options:

Build Business Credit and Get a Business Credit Card

Excellent business credit helps obtain loans and increases credit limits, and improves terms with vendors. You can establish business credit by obtaining a business credit card using your LLC’s EIN, making on-time payments to vendors, and obtaining a DUNS number from Dun & Bradstreet.

Know Your LLC Tax Responsibilities

A single-member LLC is usually regarded as a sole proprietorship by the IRS for tax purposes, while a multi-member LLC is treated as a partnership. If you can save on self-employment tax, consider the S-Corp election. Primary tax-related obligations include:

• Paying estimated tax quarterly
• Keeping a record of all deductible expenses
• Completing the required state and federal tax returns
• Collecting and paying sales tax

Hiring a tax professional early on is a wise decision, as it saves you time and money.

Get the Right Business Insurance

The personal asset protection that your LLC provides does not extend to the business. Insurance addresses that. You may need several policies, including general liability, professional liability, and commercial liability insurance, as well as workers’ compensation if you have employees. Coverage tailored to your specific industry may also be necessary.

Maintain the Corporate Veil

People do ask about keeping liability protection for an LLC in general, but here are some ideas about keeping the liability protection:

• Keep all the Business Records
• Maintain Separation of Personal and Business Accounts
• Use LLC Name
• Maintain Business Records
• Maintain Records of Business Meetings
• Meet Filing Deadlines and Paying Annual Fees
• Maintain Business Name on Every Invoice and Document

Protect Your Intellectual Property

Original business assets, like the name, logo, and the content of the business are also considered to be business assets and can be used as protection, or assets to protect, by way of trademarks on the business name and logo at USPTO, copyrights on the content of the business, and by using Non-Disclosures when freely disclosing to independent contractors or business associates.

Build Your Brand and Online Presence

First impressions of your business do come from your online presence. For the focus of your professional presence, think about:

• A website that is clear, mobile-friendly, and easy to read, as it shows your services along with your contact info.
• A Google Business Profile that shows your business locally.
• Keep the banner and logo the same on the different social media platforms.
• Brand your social media with a professional email and domain address.

You do not have to be social with all of them, like being on all the platforms, but be present on the one that matters to your customers.

Create Contracts, Templates, and Hiring Systems

Disputes due to differing interpretations of the work stem from verbal agreements. Get a solid Non-Disclosure Agreement and Service Agreements in place early. Understand the difference between an employee and a contractor when planning on hiring. To pay your employees, set up payroll.

File Annual Reports and Stay Compliant

To remain in good standing, most states require LLCs to file annual or biennial reports and pay a fee. Failure to file reports can result in penalties, such as loss of liability protection or administrative dissolution. Mark these dates in your calendar as soon as you form your LLC.

Plan for Growth and the Long Term

Think of the future. Do you plan to expand into other states that require foreign LLC registration? Do you aim to sell the business or to pass it down to your family? Outlining your process and systems, and documenting them, will help you set clear financial goals and make future transitions easier.

Now That You Have an LLC, What’s Your Next Move?

It’s common to feel a bit overwhelmed when you first form your LLC, and you don’t have to do it all at once. Start by securing your EIN, bank account, operating agreement, and business licenses. After that, you can add accounting, insurance, branding, and other compliance in the weeks that follow. The main question is, I have an LLC, now what? The answer is to build your foundation carefully, protect what you have created, and grow with intention.

Your journey begins where every successful business owner started. Take the next step today, and your future self will be grateful.

EasyFiling assists business owners with the formation and management of LLCs in the U.S. EasyFiling’s services include compliance support and post-formation assistance, which guide entrepreneurs to focus more on growing their business.