Legal Entity: Limited Liability Company or Limited Liability Partnership
Once you have completed your business plan, you are ready to start setting up your company. In the business plan, you will have chosen an entity such as a limited liability company. Before you can get your name printed on business cards and checks, you must make sure the chosen name is available from the state.
If you are going to use a limited liability entity, you must choose whether to set it up as a corporation or a partnership. The more common practice for small businesses is to use a corporation especially if family members are going to be the managing members. If you are the only person to be named as a managing member, you cannot file a limited liability partnership; you must form as a corporation.
You can apply online or by mail depending on how your Department of Corporations (often referred to as the Secretary of State) is set up. Many states have an online application process, which allows you to set up your company immediately.
When you set up the entity, have the name, your personal information, and your social security number ready. Know where the company will receive mail. If there is more than one member, have the other members’ addresses handy.
Once you complete the application by following the specific instructions for the state in which you are registering, you will need to set up additional things such as licenses, a federal employment identification number (FEIN), and bank accounts.